Hematite nanoparticles doped with 1, 3 and 5 % Zn (all % are in molar) were prepared using mechanical alloying. Morphological and phase structure studies using scanning electron microscopy and X-ray diffraction showed nanoparticles possessing a semi-spherical shape and particle size of <50 nm crystallized in rhombohedral structure. The lattice parameters of hematite increased upon Zn doping. The energy-dispersive X-ray and Fourier-transform infrared results demonstrated that Zn was successfully incorporated. The optical behavior of nanoparticles was examined by UV–Vis diffuse reflectance spectroscopy and revealed that Zn doping increased the absorption intensity in the visible light region and decreased the band gap from 1.95 (hematite) to 1.83 eV (3 % Zn). Methylene blue dye degradation by the 3 % Zn sample proved doubling of the photocatalytic activity due to electronic structure modification upon Zn doping. First principles studies using density functional theory performed to investigate the effect of Zn on the electronic band structure of hematite showed that Zn doping caused band gap reduction, causing formation of new energy states, mainly above the valence band. Eventually, the enhancement of Urbach energy and reduction of effective mass, respectively accountable for increasing the relaxation time and mobility of charge carriers, were considered the two main mechanisms regarding the increased photocatalytic behavior of hematite by Zn doping.