Vegetable oil-based lubricants have a tendency to replace traditional petroleum-based lubricants due to their biodegradability, high flash point, low volatility, and low cost. However, polar molecules such as fatty acids in vegetable oil compete for adsorption with nanoparticles during rubbing process, resulting in imperfect tribological performance of nanoparticles. Magnetic nanoadditives can be adsorbed on the contact surface of iron-based friction materials through magnetic effects, which provides a new idea for solving competitive adsorption problems between additives and base oil. In this study, Ni nanoparticles with a particle size of approximately 15.6 nm were synthesized in-situ in olive oil using nickel acetylacetone as the nickel source and olive oil as the modifier and solvent required for the reaction, which is a simple, efficient, and environmentally friendly in-situ synthesis method. The as-synthesized Ni nanoparticles can significantly improve the antiwear capabilities of olive oil, reducing the wear scar diameter by 30%. The morphology and elemental analysis of wear scar indicated that a composite tribofilm including nickel, nickel oxide, iron oxide, carbon film, and polar fatty acid molecules in olive oil is formed on the rubbing surface, greatly improving the antiwear performance, which opens up an opportunity for the further application of new green nanolubricants.