TiO₂/Fe₂O₃ composite thin films were prepared on common glass substrates by sol-gel processing and dip-drawing method. The effect of Fe₂O₃ content on the photocatalytic and hydrophilic properties of composite films was studied. The results indicate that the photocatalytic activities of composite TiO₂ films are superior to that of pure TiO₂ film, and the film containing 0.5% Fe₂O₃ has the best photocatalytic activity. The hydrophilicity is difference with variant Fe₂O₃ content, the films containing 0.05%~0.1% Fe₂O₃ have the best hydrophilicity and their contact angles are 0°.