Nanoscale zero-valent iron (nZVI) particles were investigated for the removal of methylene blue (MB) from aqueous solutions and the treatment of textile industry effluents. The nZVI material was characterized by XRD, TEM, EDS, FTIR, and SEM. It was demonstrated that several functional groups such as C–H, C = C, C–C, and C–O contributed to MB reduction. At initial MB concentration of 70 mg/L, the optimum pH was 6, achieving a removal efficiency of 72.1% using an nZVI dosage of 10 g/L, stirring rate of 150 rpm, and temperature of 30 °C within 30 min. The adsorption isotherm was described by the Langmuir model with monolayer coverage of 5.53 mg/g, and the Freundlich equation with multilayer adsorption capacity of 1.59 (mg/g)·(L/mg)1/n. The removal mechanisms of MB included reduction into colorless leuco-MB, precipitation as Fe(II)-MB, adsorption as ZVI-MB or FeOOH-MB, and/or degradation using •OH radicals. The synthesized nZVI particles were applied to reduce various organic and inorganic compounds, as well as heavy metal ions from real textile wastewater samples. The removal efficiencies of COD, BOD, TN, TP, Cu2+, Zn2+, and Pb2+ reached up to 91.9%, 87.5%, 65.2%, 78.1%, 100.0%, 29.6%, and 99.0%, respectively. The treatment cost of 1 m3 of textile wastewater was estimated as 1.66 $USD.