A new Fe₃O₄ magnetic nanoparticles supported gold dipyridine complex was successfully prepared by attaching sodium tetrachloroaurate(III) hydrate to a novel dipyridine ligand functionalized Fe₃O₄. It was found to be an efficient catalyst for the synthesis 2,6-dihydro[2,1-a]isoindole in aqueous medium. High catalytic activity and ease of recovery from the reaction mixture using an external magnet, and several reuse times without significant losses in performance are additional eco-friendly attributes of this catalytic system.