High-purity anatase nanocrystals were prepared by using a low-temperature surfactant-assisted solution-phase method. Titanium tetra-isopropoxide (TTIP) was used as a precursor, polyethylene glycol (PEG) as a surfactant, and isopropyl alcohol (IPA) and water as solvent. An isopropanolic solution of TTIP and PEG was mixed with an aqueous acidic solution at about 60 °C to yield a whitish sol that, after being baked at 60 °C for 6 hours, was transformed into phase-pure anatase crystals with dimensions of about 8 nm. By varying the mass of the PEG surfactant from 0.5 to 2 g, the particle dimensions could be controlled to be between 8 and 11 nm. Thermogravimetric analysis in combination with transmission electron microscopy (TEM), XRD, and Raman, Ultraviolet-visible (UV-vis) and infrared spectroscopies showed the nanocrystals with dimensions of 8–11 nm to be composed of an anatase lattice with hydroxyl bound to the surface. These nanocrystals showed much improved efficiency for photodegradation of methylene blue as compared with the commercial Degussa P25, due to the extraordinarily increased surface area. These findings may inspire the engineering of highly active subnanometer-sized nanocrystals for energy- and environment-related applications.