Surface and ground water contamination with NO2−/NO3− is one of the most serious environmental issues due to their adverse effects on human health and ecosystem. Various technologies have been investigated for removal of NO2−/NO3− from surface and ground water; nevertheless, the idea of utilizing NO2−/NO3− contaminated water and wastewater to produce value-added products has not yet been much explored to date. Here, we have developed a novel method for utilizing NO2−/NO3−-contaminated water as a source of nitrogen for the synthesis of benzaldoxime from benzaldehyde using ecofriendly nanoscale zero-valent iron (nZVI) as the reductant. Control experiments with NH4+ and NH2OH supported the proposed reaction mechanism that NH2OH was generated in situ as a reactive intermediate from NO2−/NO3− reduction and reacted with benzaldehyde to form benzaldoxime. The benzaldoxime yield was the largest at the highest temperature tested, 100 °C, and an nZVI-to-N ratio of ∼7 was optimal for benzaldoxime synthesis. At 100 °C, O2 in the headspace did not have any negative effect on the reaction. Benzaldoxime yields up to 0.70 ± 0.04 mmoles and 0.67 ± 0.05 mmoles were observed from reaction of 1 mmole benzaldehyde with 2 mmoles NO2− and NO3−, respectively. Meanwhile, >95% of NO2−/NO3− were reduced to either benzaldoxime or NH4+. This novel method suggests a promising option for utilization of water contaminated with NO2−/NO3− for the production of a value-added product.