57Fe doped titanium oxide monocrystals, prepared by ion implantation at different temperatures and subsequent thermal treatment, were characterized by conversion electron Mössbauer spectrometry, synchrotron radiation x-ray diffraction and superconducting quantum interference device magnetometry. After implantation at room temperature Fe is present in divalent state. Upon annealing in high vacuum Fe2+ is reduced to metallic Fe for the most part. After implantation at 623 K most iron is in metallic state. During annealing on air Fe is gradually oxidized from Fe2+ to Fe3+. Depending on preparation conditions and thermal treatment the role of different nanosized secondary phases is discussed in terms of their influence on the magnetic properties of Fe:TiO2. α-Fe nanoparticles are found to be responsible for ferromagnetism observed in TiO2.