In the last years, hematite has been utilized in a plethora of applications. High aspect-ratio nanohematite and hematite/silica core-shell nanostructures are arousing growing interest for applications exploiting their magnetic properties. Atomic layer deposition (ALD) is utilized here to produce SiO2-coated α-Fe2O3 nanofibers (NFs) through two synthetic routes, viz. electrospinning/calcination/ALD or electrospinning/ALD/calcination. The number of ALD cycles (10-100) modulates the coating thickness, while the chosen route controls the final nanostructure. Porous and partially hollow NFs are produced. Their hierarchical structure and the nature and density of the lattice defects and strain are characterized by combining electron microscopy, diffraction, and spectroscopy techniques. The uncoated hematite NFs mostly have surface-related strain, which is attributed to oxygen vacancies/Fe2+ sites. ALD coating causes microstrain release and decrease of surface states. NFs calcined after ALD have extensive bulk strain, which is ascribed to the presence of dislocations throughout the volume of the NF grains. Bulk strain determines the remanent magnetization, whereas both surface and bulk strain influence the coercive field and the thermal behavior across the Morin temperature, including the magnetic memory effect. To the best of the authors' knowledge, the correlation between lattice defects/strain and magnetic properties of SiO2-coated α-Fe2O3 NFs has never been reported before.