Nano-size MgBi₂O₄ has been synthesized for the first time via a simple co-precipitation method using the surfactant N-cetyl-N, N,N-trimethylammonium bromide (CTAB). Fourier transform infrared (FTIR), scanning electron microscopy (SEM), energy-dispersive X-ray spectroscopy (EDX), and X-ray powder diffraction (XRD) techniques were employed to characterize the nano-catalyst. Additionally, the reactivity of the prepared nanoparticles was investigated in the synthesis of 1'-aryl-2'-(2-oxoindolin-3-yl)spiro[indoline-3,5'-pyrroline]-2,3'-diones in a one-pot, one-step and pseudo four-component condensation of arylamine, acetone, and isatins at 50◦C in water. Five new compounds were synthesized and identified. This procedure has various advantages such as, short reaction times, mild eco-friendly conditions and excellent yields to prepare a novel class of heteroaromatic compounds. MgBi₂O₄ possess superior qualities such as easy and economic preparation procedure and handling, stability, and non-toxicity. Its reusability has also been examined upto 4 runs without activity loss.