Abstract: Motivated by the recent synthesis of two-dimensional alpha-Fe2O3 (Balan et al 2018 Nat. Nanotechnol. 13 602), we analyze the structural, vibrational, electronic and magnetic properties of single- and few-layer alpha-Fe2O3 compared to bulk, by ab initio and Monte-Carlo simulations. We reveal how monolayer alpha-Fe2O3 (hematene) can be distinguished from the few-layer structures, and how they all differ from bulk through observable Raman spectra. The optical spectra exhibit gradual shift of the prominent peak to higher energy, as well as additional features at lower energy when alpha-Fe2O3 is thinned down to a monolayer. Both optical and electronic properties have strong spin asymmetry, meaning that lower-energy optical and electronic activities are allowed for the single-spin state. Finally, our considerations of magnetic properties reveal that 2D hematite has anti-ferromagnetic ground state for all thicknesses, but the critical temperature for Morin transition increases with decreasing sample thickness. On all accounts, the link to available experimental data is made, and further measurements are prompted.