Hematite (alpha-Fe2O3) nanoparticles with different shape and size were obtained by hydro-solvothermal technique under various conditions. The structural, morphological and magnetic properties of the synthesized alpha-Fe2O3 nanoparticles were characterized using XRD, FESEM with EDX, FTIR and VSM. The results revealed that the size and shape of the alpha-Fe2O3 nanoparticles can be modified by changing the synthetic parameters like reaction temperature, pH of the solution, and solvents used for synthesis. The zebrafish embryos exposed to different concentrations of alpha-Fe2O3 nanoparticles and its physical anomalies were monitored in order to study its ecological toxicity. The changes in hatching rate, survival percentage, heartbeat count, body length of zebrafish due to alpha-Fe2O3 nanoparticles were analyzed. Toxicity assessment in the early life stage of zebrafish shows that minor changes occurred at lower concentrations of nanoparticles and some malformations at higher concentrations compared to the control group. The results revealed that the toxicity of zebrafish was greatly depended on the size and the concentration of alpha-Fe2O3 nanoparticles.