In this study, jarosite waste was adopted as feed material for micaceous iron oxide (MIO) pigment preparation by a one-pot hydrothermal reaction. The formation of MIO started from jarosite decomposition into akaganeite (β-FeOOH) nanoparticles in alkali solution, which then recrystallized and transformed into MIO crystals under high temperature and OH− concentration. The influences of NaOH concentration and reaction temperature on MIO formation were investigated. It was found that MIO formed when NaOH concentration and reaction temperature were equal to or higher than 2 M and 180°C, respectively. With an increase of NaOH concentration or reaction temperature, the particle size of MIO increased, leading to darkened color of the product. Moreover, quality evaluation indicated that the synthesized MIO fulfilled the required characteristics of micaceous iron oxide pigments for paints and the international standard of ISO 10601-2007 MIO-A1.