We propose an exploding wire technique based facile approach to prepare Fe2O3 nanoparticles in ambient conditions. TG-DSC analysis of the prepared precursor (Fe(OH)(3)) nanoparticles were done. The phase, lattice parameter and the average crystallite size were evaluated through X-ray diffraction analysis. The morphology of prepared nanoparticles was studied by scanning electron microscopy and Transmission electron microscope. The functional group formation of Fe2O3 nanoparticles and intrinsic stretching vibration bands of Fe-O were estimated through FTIR analysis. The direct band gap of Fe2O3 nanoparticles occurring in conjunction with indirect band gaps was established via Tauc plot. The magnetic parameters were studied through Mossbauer spectroscopy, ESR, M-H and M-T plot analysis. The attributes of dielectric behaviour like dielectric constant (epsilon '), loss tangent (tan delta), dielectric loss (epsilon '') and alternating current (AC) conductivity (sigma(AC)) were measured at various temperatures in the frequency range of 10 Hz-10(6) KHz.