A thin layer of alpha-Fe2O3 nanoparticles is immobilized on the surface of PET fibers using ferric nitrate and oxalic acid as the precursors in one step at low temperature in a hydrothermal process. The as-prepared alpha-Fe2O3-coated PET fibers are systematically characterized using different characterization techniques. The properties of tensile, durable washing, and photocatalytic activity are also investigated. The experimental results reveal that after the hydrothermal process the as-prepared alpha-Fe2O3 nanoparticles with diameter of 100 nm or so are grafted onto fiber surfaces. The degree of crystallinity of PET fiber increases, while the degree of orientation decreases. The thermal stability increases slightly. The visible light absorption capability and magnetism are obtained. The tensile properties decrease to some extent. The bonding strength between the alpha-Fe2O3 nanoparticle and PET fiber is enhanced by coupling KH151. The alpha-Fe2O3 coated PET fibers can degrade the adsorbed methyl orange under ultraviolet lights.