SnO2-Fe2O3 nanopowders prepared by the polymeric precursor method were studied by combined conventional and high-resolution techniques. The powders treated at 500°C were analyzed by EDS local probe associated with HRTEM to directly detect surface segregation of Fe ions onto SnO2 nanoparticles over a broad range of concentrations. The segregation of these ions controls the system microstructure by changing the surface energies and acting as nucleation sites for the formation of a Fe oxide phase (magnetite) at high Fe concentrations. A technologically interesting core-shell-type particle structure, with a magnetic shell and semiconductor core, was observed for the first time. The influence of the segregated Fe ions in Mössbauer spectra is also addressed as a new proposal for the interpretation of the effects of composition changes in both the bulk and at the interface of particles. In this proposal, the two observed sites in Mössbauer spectra would be independently related to bulk-substituted and surface-segregated Fe ions. © Wiley-VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2005.