In this study, hematite/reduced graphene oxide (α-Fe2O3/rGO) nanocomposites with varying GO content were synthesized and their structural, optical, surface chemical and magnetic properties were investigated. Graphene oxide was thermally reduced, as confirmed by Fourier transform infrared (FTIR) spectroscopy, which showed the disappearance of absorption peaks corresponding to oxidized functional groups in the spectrum of α-Fe2O3/rGO nanocomposites. Additionally, the wrinkles observed in the FESEM images are attributed to the thermal reduction process, which converted graphene oxide into reduced graphene oxide. X-ray diffraction patterns indicated a homogeneous distribution of rGO sheets in nanocomposites, as evidenced by the absence of the characteristic broad stacking peak of rGO around 26 degrees. The crystallite size of hematite nanoparticles in the nanocomposite samples varied between 22 and 31 nm, with only slight deviations in the lattice parameters of hematite observed across different GO contents. Raman spectroscopy revealed a blue shift in the G-band of rGO within the nanocomposite samples. X-ray photoelectron spectroscopy showed a positive shift in the binding energy of the Fe 2p core level spectra, signifying an interaction between rGO and the iron oxide surface. The incorporation of GO enhanced the ferromagnetic properties of hematite nanoparticles in the nanocomposite. Additionally, the nanocomposite exhibited high adsorption efficiency for methylene blue, achieving 89% degradation of a 10 µM solution with a catalytic load of 0.9 g/L. Photocatalytic experiments under sunlight further confirmed effective dye decolorization by the nanocomposite samples. The synergistic interaction of hematite and rGO in the nanocomposites was also discussed in dye decolorization.