Photoelectrochemical cell (PEC) water splitting using hematite as a photoanode has great potential for harnessing solar energy to produce hydrogen. Hematite possesses several advantageous properties, such as abundant availability in nature, eco-friendliness, high photochemical stability, a narrow bandgap (1.9–2.2 eV), and the ability to achieve a theoretical maximum solar-to-hydrogen efficiency of 15.4%. However, its limited light absorption capability, short excited-state lifetime (10⁻⁶ s), sluggish oxygen evolution reaction kinetics, short hole diffusion length (2–4 nm), and poor electrical conductivity lead to various pathways for electron–hole recombination within the material's bulk, interfaces, and surfaces. These factors significantly restrict the PEC activity of hematite photoanodes. Consequently, extensive research efforts have been dedicated to improving the performance of hematite photoanodes. To enhance the PEC efficiency of hematite, three key aspects require improvement: (I) photon absorption efficiency, (II) charge separation within the semiconductor bulk, and (III) surface charge injection efficiency. This review offers a concise summary of the recent advancements in charge separation research in bulk, surface, and interface studies for water splitting. Furthermore, it provides a comprehensive discussion and summary of the various concepts and mechanisms applied to improve the overall PEC performance of hematite photoanodes.