Nanometer-sized hematite was prepared via a two-step process. In the first step, FeSO₄·7H₂O was oxidized to Fe₂(SO₄)₃ by oxygen in an acidic solution. In the second step, the Fe₂(SO₄)₃ was reduced to nanosize hematite with sulfur vapor at 550 °C. The hematite has good thermal stability up to 500 °C and good colloid stability in water-based paint. Its properties satisfy the requirements of the international standard ISO 1248-A-I-1-a for an iron oxide red pigment. Graphical abstract: [Figure not available: see fulltext.]