Iron oxide nanoparticles are present throughout the Earth and undergo mineral phase transformations that affect their stability and reactivity. The formation of the iron oxide hematite from a 2-line ferrihydrite (2lnFh) precursor requires both phase transformation and growth. Whether phase transformation occurs before or after substantial particle growth, and by which mechanisms particles grow, remain unclear. We conducted time-resolved studies employing X-ray diffraction, room temperature and cryogenic transmission electron microscopy, preferential dissolution by oxalate buffer, and low temperature SQuID magnetometry to investigate the kinetics and mechanism of hematite formation from 2lnFh. A novel form of magnetic measurement was found to be exquisitely sensitive to the presence of hematite, detecting its formation at far lower concentrations than possible with X-ray diffraction. These results indicate that small hematite domains were present even in as-prepared 2lnFh suspensions as a side-product of 2lnFh synthesis and that the hematite domains increased in size and crystallinity with aging time at elevated temperatures. Second-order kinetics reveals that the hematite growth is consistent with a particle-mediated growth mechanism, possibly oriented attachment.