We attempt the direct synthesis of TiO2 by using the solid state precursor TiH2 powder with oxygen in a thermal plasma reactor. Nanocrystalline titanium dioxide powder has been synthesized by using thermal plasma synthesis in a non-transferred arc thermal plasma reactor. The thermal plasma-synthesized powder product consists of nano-sized particles of anatase and rutile phases of titanium dioxide. Particle compositions were observed on collecting powder from different positions of the reactor and varying the amount of flow rate of reactive gases (O-2). The characteristics of the powder such as particle size, size distribution and phases were analyzed using various techniques such as XRD, SEM, TEM, XPS, EDS and particle size analyzer. UV-visible reflection spectroscopy of the plasma-synthesized TiO2 powders showed the absorbance in the visible region leading to effective photocatalytic activity, which is clearly confirmed from the XPS analysis. XPS analysis reveals the presence of -OH bonds on the surface of nanoparticles, which is the significant evidence of better quality of powders in comparison to other methods. Also, we have investigated the phase transformation phenomenon of anatase to rutile. At 1000 degrees C, complete transformation of the anatase to rutile occurs. Powders prepared in this procedure are white in colour and their diameter varies from 10 nm to 150 nm. Average particle size distributes in the range of 20-50 nm. The unique property about the plasma-synthesized powders is high resistance to heat treatment, with enhanced photocatalytic activity. (C) 2011 The Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.