Photocatalytic water splitting for hydrogen production and water pollutant degradation is a frontier topic to solve energy and environmental problems. In particular, applying electric and magnetic fields on photocatalysts is the most promising solution to improve their catalytic activity. In this work, bifunctional catalyst PDDA-coated β-Fe2O3nanoclusters (β-Fe2O3@PDDA) have been successfully synthesized by a simple one-pot method at 200 °C. β-Fe2O3@PDDA exhibits excellent photoelectrocatalytic (PEC) activity for the oxygen evolution reaction (OER) with an overpotential of 300 mV, Tafel slope of 45 mV dec−1and good catalytic stability. Moreover, β-Fe2O3@PDDA exhibited a good magnetic field-enhanced photocatalytic (MF-PC) RhB degradation activity under artificial simulated sunlight; the photocatalytic efficiency can be improved by 44% under an external magnetic field than that without a magnetic field. The surface PDDA-coated β-Fe2O3can be stably dispersed in water for more than 10 days without agglomeration, which is of great significance for the MF-PC degradation of water pollutants in practical applications. The high catalytic activity for MF-PC is attributed to the magnetic field-suppressed electron–hole recombination and the spin-polarized properties of β-Fe2O3in photocatalysis. Our study provides a new strategy for the preparation of highly dispersed β-Fe2O3nanoclusters under mild conditions and the development of ultrastable organic/inorganic composite photocatalysts. This opens up a new avenue for developing electric and magnetic field-enhanced photocatalysts for use in clean energy and environmental control.