We report the influence of external magnetic fields applied parallel or perpendicular to the substrate during plasma chemical vapor deposition (PECVD) of hematite (α‐Fe2O3) nanostructures. Hematite films grown from iron precursors show pronounced changes in phase composition (pure hematite vs. coexistence of hematite and magnetite) and crystallographic textures depending upon whether PECVD is performed with or without the influence of external magnetic field. Static magnetic fields created by rod‐type (RTMs) or disk‐type magnets (DTMs) results in hematite films with anisotropic or equiaxed grains, respectively. Using RTMs, a superior photoelectrochemical (PEC) performance is obtained for hematite photoanodes synthesized under perpendicularly applied magnetic field (with respect to substrate), whereas parallel magnetic field results in the most efficient hematite photoanode in the case of DTM. The experimental data on microstructure and functional properties of hematite films show that application of magnetic fields has a significant effect on the crystallite size and texture with preferred growth and/or suppression of grains with specific texture in Fe2O3 films. Investigations on the water splitting properties of the hematite films in a photoelectrochemical reactor reveal that photocurrent values of hematite photoanodes are remarkably different for films deposited with (0.659 mA cm−2) or without (0.484 mA cm−2) external magnetic field.