Photocatalysis is a rapidly growing field for degradation of organic compounds including dyes. This paper describes the synthesis of nanocrystalline α-Fe2O3 by sol-gel method and its photoactivity for degradation of malachite green (MG) dye. α-Fe2O3 samples were synthesized at different temperatures; 450, 550 and 650ºC. At 550ºC, the α-Fe2O3 nanocrystals were formed with crystallite size 19.9 nm and specific surface area 177.4m2/g. The 200 mg of the catalyst sample showed high photoactivity at 100 ppm dye concentration in alkaline medium at pH 10.