The method of synthesizing nanoshell of alpha-Fe2O3 on silica core nanoparticle and hollow alpha-Fe2O3 nanoparticles is described. The silica particles of approximately 160 nm diameter were surface modified using 3-aminopropyltrimethoxysilane (APS) for easy adsorption of iron on it. These particles were treated with FeCl3 and further heat treated up to 1000 degrees C to get alpha-Fe2O3 shell of thickness approximately 20 nm. The hollow iron oxide particles were prepared using sacrificial core removal using dilute HF solution. The particles were characterized for their structure, morphology, bonding and surface chemistry using Transmission Electron Microscopy (TEM), X-ray Diffraction (XRD), Fourier Transform Infra Red Spectroscopy (FTIR), and X-ray Photoelectron Spectroscopy (XPS).