Synchrotron X-ray diffraction was used to monitor the hydrothermal precipitation of akaganeite (β-FeOOH) and its transformation to hematite (Fe2O3) in situ. Akaganeite was the first phase to form and hematite was the final phase in our experiments with temperatures between 150 and 200 °C. Akaganeite was the only phase that formed at 100 °C. Rietveld analyses revealed that the akaganeite unit-cell volume contracted until the onset of dissolution, and subsequently expanded. This reversal at the onset of dissolution was associated with a substantial and rapid increase in occupancy of the Cl site, perhaps by OH− or Fe3+. Rietveld analyses supported the incipient formation of an OH-rich, Fe-deficient hematite phase in experiments between 150 and 200 °C. The inferred H concentrations of the first crystals were consistent with “hydrohematite.” With continued crystal growth, the Fe occupancies increased. Contraction in both a- and c-axes signaled the loss of hydroxyl groups and formation of a nearly stoichiometric hematite.