N-doped titania powders were prepared with titanium tetraisopropoxide (TTIP) as the titanium source and urea as the nitrogen source by the sol-gel method. The samples were characterized using X-ray diffraction (XRD), diffuse reflectance spectrum (DRS), X-ray photoelectron spectroscopy (XPS), and transmission electron microscopy (TEM). The XRD and TEM results indicated that urea played an important role in controlling the size and aggregation process of titania nanoparticles. As an appropriate amount of urea was added into the titania sol, the size of the particles decreased. However, the excess urea reduced the dispersion of the particles and resulted in the aggregation. At the same time, the size of particle increased, and the size distribution broadened. The XPS and DRS results showed that the nitrogen was incorporated into titania lattice successfully, which brought about the redshift of the absorption edge and induced the photocatalytic activity in the visible light region. The photocatalytic experiments showed that the N-doped titania nanoparticles could effectively photodegrade methyl orange (MO) aqueous solution under visible light irradiation. The photocatalytic activity increased with the increase of the nitrogen doping level in the titania lattice, but decreased with the increase of the particle size and the organic surface residues caused by excess urea.