Heterostructures of TiO 2 @Fe 2 O 3 with a specific electronic structure and morphology enable us to control the interfacial charge transport necessary for their efficient photocatalytic performance. In spite of the extensive research, there still remains a profound ambiguity as far as the band alignment at the interface of TiO 2 @Fe 2 O 3 is concerned. In this work, the extended type I heterojunction between anatase TiO 2 nanocrystals and α-Fe 2 O 3 hematite nanograins is proposed. Experimental evidence supporting this conclusion is based on direct measurements such as optical spectroscopy, X-ray photoemission spectroscopy, scanning electron microscopy, high-resolution transmission electron microscopy (HRTEM), and the results of indirect studies of photocatalytic decomposition of rhodamine B (RhB) with selected scavengers of various active species of OH • , h • , e − , and • O 2 − . The presence of small 6−8 nm Fe 2 O 3 crystallites at the surface of TiO 2 has been confirmed in HRTEM images. Irregular 15−50 nm needle-like hematite grains could be observed in scanning electron micrographs. Substitutional incorporation of Fe 3+ ions into the TiO 2 crystal lattice is predicted by a 0.16% decrease in lattice parameter a and a 0.08% change of c, as well as by a shift of the Raman E g(1) peak from 143 cm −1 in pure TiO 2 to 149 cm −1 in Fe 2 O 3 -modified TiO 2 . Analysis of O 1s XPS spectra corroborates this conclusion, indicating the formation of oxygen vacancies at the surface of titanium(IV) oxide. The presence of the Fe 3+ impurity level in the forbidden band gap of TiO 2 is revealed by the 2.80 eV optical transition. The size effect is responsible for the absorption feature appearing at 2.48 eV. Increased photocatalytic activity within the visible range suggests that the electron transfer involves high energy levels of Fe 2 O 3 . Well-programed experiments with scavengers allow us to eliminate the less probable mechanisms of RhB photodecomposition and propose a band diagram of the TiO 2 @Fe 2 O 3 heterojunction.