Maghemite (γ-Fe2O3) nanopowders were synthesized under aeration (oxidizing) conditions by aqueous synthesis in this study. The microstructures of the prepared powders were characterized by X-ray diffraction (XRD), scanning electron microscopy (SEM), and BET-BJH. The XRD analysis and the chemical experiments showed that well-crystallized γ-Fe2O3 nanoparticles were successfully obtained with a mean particle size of approximately 17 nm. The prepared γ-Fe2O3 was spherical with a BET surface area of 14.357 m2/g and a total pore volume of 0.050 cm3/g. Varying the reaction conditions, such as pH, temperature, and reaction time, we obtained crystallized γ-Fe2O3 powders with different crystallization extent and different particle sizes. When the pH of the reaction suspension was increased, the reaction time was prolonged, and the reaction temperature was increased, the γ-Fe2O3 powders underwent superior crystallization and had larger particle sizes. All the obtained γ-Fe2O3 powders had significant photocatalytic activities under both UV and visible light irradiation for Orange I degradation, and the powders with better crystallization and larger particle size had relatively lower activities for Orange I photocatalytic degradation. The one-step aqueous synthesis method presented in this paper may provide an advantageous pathway to synthesize large quantities of this important iron oxide.