Highly aqueously dispersible (soluble) TiO2 nanoparticles are usually synthesized by a solution-based sol-gel (solvolysis/condensation) process, and no direct precipitation of titania has been reported. This paper proposes a new approach to synthesize stable TiO2 nanoparticles by a non-solvolytic method - direct liquid phase precipitation at room temperature. Ligand-capped TiO2 nanoparticles are more readily solubilized compared to uncapped TiO2 nanoparticles, and these capped materials show distinct optical absorbance/emission behaviors. The influence of ligands, way of reactant feeding, and post-treatment on the shape, size, crystalline structure, and surface chemistry of the TiO2 nanoparticles has been thoroughly investigated by the combined use of X-ray diffraction, transmission electron microscopy, UV-visible (UV-vis) spectroscopy, and photoluminescence (PL). It is found that all above variables have significant effects on the size, shape, and dispersivity of the final TiO2 nanoparticles. For the first time, real-time UV-vis spectroscopy and PL are used to dynamically detect the formation and growth of TiO2 nanoparticles in solution. These real-time measurements show that the precipitation process begins to nucleate after an initial inhibition period of about 1 h, thereafter a particle growth occurs and reaches the maximum point after 2 h. The synthesis reaction is essentially completed after 4 h.