To design a high-performance photocatalytic system with TiO2, it is necessary to reduce the bandgap and enhance the absorption efficiency. The reduction of the bandgap to the visible range was investigated with reference to the surface distortion of anatase TiO2 nanoparticles induced by varying Fe doping concentrations. Fe-doped TiO2 nanoparticles (Fe@TiO2) were synthesized by a hydrothermal method and analyzed by various surface analysis techniques such as transmission electron microscopy, Raman spectroscopy, X-ray diffraction, scanning transmission X-ray microscopy, and high-resolution photoemission spectroscopy. We observed that Fe doping over 5 wt.% gave rise to a distorted structure, i.e., Fe2Ti3O9, indicating numerous Ti3+ and oxygen-vacancy sites. The Ti3+ sites act as electron trap sites to deliver the electron to O2 as well as introduce the dopant level inside the bandgap, resulting in a significant increase in the photocatalytic oxidation reaction of thiol (–SH) of 2-aminothiophenol to sulfonic acid (–SO3H) under ultraviolet and visible light illumination.Electronic supplementary materialThe online version of this article (doi:10.1186/s11671-016-1263-6) contains supplementary material, which is available to authorized users.