Mn-doped TiO2 powders with a wide range of nominal doping levels were fabricated using a one-step hydrothermal method followed by 400 °C annealing. Anatase powders with a uniform size distribution below 10 nm were obtained. The maximum solubility of Mn in the TiO2 lattice was around 30%, beyond which the Mn3O4 compound appeared as a secondary phase. The optical absorption edges for Mn-doped anatase TiO2 were red-shifted effectively through increasing Mn content. Alloying chemistry and associated elemental valences were elaborated through combining X-ray photoelectron spectroscopy (XPS), X-ray absorption spectroscopy (XAS), and theoretical simulation in the framework of density functional theory (DFT). The results showed that the Mn species exhibited mixed valence states of 3+ and 4+ in anatase TiO2, with the latter being the key to remarkable photocatalytic performance.