We report a novel method of synthesizing rutile TiO2 nanocrystals at low temperature (200 degrees C) via a butanol rinsing process followed by heat treatment in an O2 atmosphere. The rutile nanocrystals show uniform size distribution of approximately 20 nm and good crystallinity confirmed by X-ray diffraction and transmission electron microscopy. A mechanism for the low temperature synthesis of rutile nanocrystals is rationalized in terms of an explosive thermal decomposition reaction of butoxy groups on TiO2 powders with O2 gas. Characterizations of the photovoltaic and photocatalytic properties of rutile nanocrystals exhibited higher photoactivity than large-sized conventional rutile powder, which demonstrates that this novel synthesis technology could expand applications of rutile powders to various photoactive devices beyond solar cells and photocatalysts.