We have investigated the optical properties of Ti4O7 single crystals. It is found that the reflection spectrum changes discontinuously at about 150 and 130K. These temperatures correspond to two-phase transitions, i.e., metal-semiconductor and semiconductor semiconductor transition. The spectra are analyzed with the use of a classical dielectric function. It is inferred that the changes in the spectrum at the two-phase transitions originate from formation of bipolarons, which induce a splitting of the Ti 3d band into bonding and antibonding states. (c) 2006 Elsevier B.V. All rights reserved.