In this paper, effect of oxygen partial pressure on formation of Fe2O3 nanostructure during Thermal Oxidation was studied. Fe2O3 nanostructure was formed by controlling oxidation conditions (Po2) and using the method of thermal oxidation. To begin with, a piece of pure iron in a ceramic crucible was put in the tube furnace (SYS-G-Z-13). Next the metallic Fe was oxidized at 500°C for 4 hours, under different oxygen partial pressure including pure argon (Po2 = 0atm), air Po2 = 0.21atm) and pure oxygen (Po2 = 1atm) to produce nanostructure, respectively. The surface morphology of the oxidized specimens was observed by SEM. The crystalline structure of the nanostructure was determined by transmission electron microscope. The experimental results show that the density of nanosheets increases with increasing oxygen partial pressure.