Nanocrystalline Sn1-xFexO2 (where x = 0, 0.01, 0.02, 0.03 and 0.04) powders have been successfully synthesized by the hydrothermal method followed by sintering at 1000 C for 3 h. The morphology and structure of the samples have been analyzed by field emission scanning electron microscope and X-ray diffraction, respectively. X-ray diffraction results revealed that all diffraction peaks positions agree well with the reflection of a tetragonal rutile structure of SnO2 phase without extra peaks. The formation of a tetragonal rutile structure of SnO2 nanostructures was further supported by the Raman spectra. The band gap of Fe-doped SnO2 nanoparticles was estimated from the diffuse reflectance spectra using the Kubelka–Munk function and it was decreasing slightly with the increase of Fe ion concentration from 3.59 to 3.52 eV. The variation in band gap is attributed predominantly to the lattice strain and particle size. The presence of chemical bonding was confirmed by the Fourier transform infrared spectra.