Rhombohedral single crystallites of hematite (iron oxide, alpha -Fe2O3) in the size range of 20-200 nm have been synthesized by forced hydrolysis in water. The optical Rayleigh scattering and AFM topography of individual crystallites have been recorded on an inverted microscope based apparatus. Individual crystallites show narrow Mie "optical cavity" resonances across the visible spectrum as the particle size increases. These spectra are far sharper than the size broadened extinction spectra of the parent colloid. In the blue region near the intense band gap optical absorption, the resonances are also significantly sharper than calculated from simple scattering theory. This unexpected structure is discussed in terms of single crystallite birefringence, and uncertainties in hematite bulk optical properties.