Fe-doped nanocrystalline samples of titanium oxide have been synthesised by sol–gel route and conventional sintering process at 450°C under atmospheric conditions. These samples are characterised by X-ray diffraction (XRD), X-ray photoelectron spectroscopy, transmission electron microscopy (TEM) and dielectric property measurement. Samples with Fe content more than 4 mole% crystallises in rutile phase and those with less than 4 mole% crystallises in anatase phase. Nanocrystallite size has been controlled by Fe doping. Crystallite size was found to decrease with Fe concentration in the anatase phase samples whereas reverse happens in rutile phase samples of titanium oxide. There is a slight variation in numerical values of crystallite sizes measured by the two techniques: TEM and XRD peak broadening. The highest crystallite size was 86 nm in 10 mole% Fe-doped samples and the lowest 20 nm in 4 mole% Fe-doped sample. Large dispersions and anomalous values of the dielectric constant, εr were observed at low frequency in anatase phase samples. Rutile phase samples exhibit little dispersion over the measurement frequency range of 20 Hz to 10 MHz. The dielectric constant value of all the samples stabilises to a constant value at higher frequencies. This value is dependent on the final crystalline phase but independent of the crystallite size. The anomalous dielectric behaviour of anatase samples at low frequencies is assigned to the adsorbed –OH ions on the sample surface.