On the corrosion protection of carbon steel by sol-gel derived TiO₂ coating under the illumination of light, the photoelectrochemical behavior of TiO₂/steel system is investigated. The diffusion of Fe ions into TiO₂ in the heat treatment of the coating process greatly degrades the photo-effect of TiO₂ coating. An Fe oxide layer at the TiO₂-steel interface, formed by oxidizing the steel above 500°C in air before coating, has been shown to retard the diffusion. The importance of α-Fe₂O₃ in the photo-response of TiO₂/steel and the effect of its changing properties with oxidation temperature are discussed. The results on the effect of heat treatment condition in the coating process show that the TiO₂/steel specimens exhibit remarkably less noble photopotentials when the heating temperature is increased above 300°C, which is related to the crystallization of TiO₂ above this temperature. The ennoblement of photopotential caused by the further increase in heating temperature above 500°C is a result of Fe diffusion through the oxide layer at the interface. Under the optimum conditions for steel oxidation and TiO₂ coating, the feasibility of localized corrosion prevention by TiO₂ coating under illumination is clearly demonstrated by the fact that the photopotentials of TiO₂/steel in deaerated solution are much less noble than the repassivation potential of carbon steel.