Abstract: We have developed a simple surface modification technique to avoid irreversible agglomeration of titanium dioxide nanoparticles. The technique is based on hydrolysis-precipitation procedure, using TiOSO4 as a precursor and water as a hydrolyser and a preparation medium. Diethylene glycol monomethyl ether is used as a surface modifier. Using a variety of characterization techniques, including XRD, SEM, TEM, TGA, DTA, AES, XPS, ELS and DLS, the resulting powders and the mechanism of surface stabilization were investigated. According to the proposed mechanism, hydroxyl-terminated ether molecules react with the surface of nanoparticles and then chemically adsorbed there. The layer of adsorbed molecules prevents the strong irreversible agglomeration during precipitation from the sol. The obtained anatase powder remains within the nanometric scale under heat-treatment up to 760°C. The powders can be re-dispersed in water by ultrasound treatment, resulting in relatively stable aqueous dispersions. In addition, the morphology of sintered bodies made of these powders is significantly improved as compared to non-stabilized powders, due to less agglomeration in the initial sintering stage.