Nanosized hollow iron oxide was synthesized using high-intensity ultrasound with carbon nanoparticles as a template. The hollow iron oxide was characterized by TEM, STEM, EELS, XRD, Raman, Mossbauer, and SQUID analyses. The TEM examination, EDS, and EELS analyses demonstrated the formation of iron oxide with nanosized hollow cores. XRD, Raman, and Mossbauer studies revealed that the hollow iron oxide is the most thermodynamically stable iron oxide, hematite (alpha-Fe2O3). Magnetization measurements showed that the hollow nanospheres of hematite are weakly ferromagnetic. Upon annealing, the hollow hematite becomes more crystalline but still maintains the hollow structure. Without the use of the carbon template, only agglomerated amorphous iron oxide was obtained.