Nanocrystalline titanium oxide powder has been synthesized by reactive plasma processing. The precursor powder of TiH2 is oxidized 'in-flight' in a thermal plasma reactor to generate nanocrystalline titania powder. The synthesized powder consists of nano-sized particles of anatase and rutile phases of titanium dioxide. Photocatalytic activity of the plasma-synthesized powder was evaluated by studying the degradation of methylene blue dye solution under direct sunlight as well as UV irradiation. FTIR spectroscopy and X-ray photoelectron spectroscopy have been used to analyze the catalytic activity of the plasma-synthesized powder. UV-visible diffused reflectance spectra of the plasma-synthesized TiO2 samples showed that they absorb in the visible region leading to effective photocatalytic activity in sunlight. The results corroborated that the plasma-synthesized powder can be effectively used for outdoor applications. (C) 2009 Elsevier B.V. All rights reserved.