Mn-doped TiO2 nanocrystals encapsulated in a carbon layer (Ti1-xMnxO2@C) were synthesized by the one-pot RAPET (reaction under autogenic pressure at elevated temperature) technique. Manganese was doped into the body-centered tetragonal TiO2 anatase phase to give a Mn:Ti atomic ratio of 1%, 5% and 10%. The surface modification by carbon was achieved in order to make the cubic/tetragonal nanocrystals non-toxic and biocompatible. Electron paramagnetic resonance (EPR) studies revealed a broad resonance (centered at g = 1.9977 due to the interacting spins in the oxide matrix) with increased dopant concentration and the resonance due to carbon. Manganese is mainly present as +II or +III oxidation states. The magnetic behavior was found to be very dependent on the manganese concentration with a ferromagnetic behavior of the 1% doped sample due to the coupling between carriers and manganese spins. A predominant paramagnetic behavior was observed for the higher Mn-doped samples. This study opens up a new dimension for the carbon encapsulation of room-temperature ferromagnetic diluted magnetic semiconductor (DMS) nanomaterials.