Herein we report synthesis of hematite (α-Fe2O3) nanorods by calcinating hydrothermally synthesized goethite nanorods at 5000C. The structural, optical and MRI imaging guided cancer therapeutic properties of fabricated nanorods have been discussed in this manscript. FESEM and TEM imaging techniques were used to confirm the nanorod like morphology of as prepared materials. As we know that Fe2O3 nanorods with size in the range of 25–30 nm exhibit super magnetism. After coating with the PEG, the as prepared nanorods can be used as T2 MR imaging contrast agents. An excellent T2 MRI contrast of 38.763 mM–1s–1 achieved which is highest reported so far for α-Fe2O3. Besides the as prepared nanorods display an excellent photothermal conversion efficiency of 39.5% thus acts as an excellent photothermal therapeutic agent. Thus, we envision the idea of testing our nanorods for photothermal therapy and MR imaging application both in vitro and in vivo, achieving an excellent T2 MRI contrast and photothermal therapy effect with as prepared PEGylated nanorods.