In situ RHEED and XPS measurements of epitaxial α-Fe O (0001) films are reported as a function of the number of deposited monolayers. The films were prepared on α-Al O (0001) substrates by MBE. The RHEED patterns suggest that layer-by-layer growth of α-Fe O (0001) occurs for the first few monolayers. Subsequently, the growth mode changes to three-dimensional growth. The in-plane lattice constant of the first monolayer of α-Fe O (0001) is expanded relative to that of the bulk, although in the case of lattice matching between α-Al O and α-Fe O a contraction would be expected. This can be explained by assuming a basic hexagonal structure for the first monolayer with a random distribution of ferric ions over the octahedral sites between the close-packed oxygen layers. Beyond the first monolayer, the ordered corundum structure is formed. The lineshapes of the XPS Fe 2p core level spectra are also found to be thickness-dependent. The deviation of the Madelung potential at the surface shifts the positions of the Fe 2p peaks to lower binding energies. For the first few monolayers, the satellite intensity is reduced because the interplanar contraction leads to a shorter Fe-O distance. 2 3 2 3 2 3 2 3 2 3 2 3