TiO2 nanocrystals with well-controlled facets were synthesized using a hydrothermal method. Decreasing concentration of the bridging ligand allowed us to modify the morphology and shape in a sequence nanorods -> nanocubes -> nanosheets. The co-precipitation was used to cover TiO2 nanocrystals with Fe2O3 nanoparticles. Transmission Electron Microscopy TEM, Scanning Electron Microscopy SEM, X-ray diffraction XRD, Raman spectroscopy, electrophoretic light scattering ELS and optical spectrophotometry in uv/vis/nir ranges were applied for materials characterization. Band diagram, consisting of three-component heterojunction, was proposed based on the calculations of optical transitions between valence and conduction bands of TiO2@Fe2O3 determined from the analysis of the reflectance spectra. The acceptor-type energy level (0.38-0.46 eV above the top of TiO2 valence band) was attributed to trivalent iron ions incorporated into the titanium sub-lattice.