A hybrid hydrogel based on polypyrrole and hydrothermally prepared alpha-Fe2O3 nanoparticles was synthesized via in situ chemical polymerization of pyrrole using sodium trimetaphosphate as a crosslinker. Wide-angle X-ray diffraction study confirmed the presence of alpha-Fe2O3 in the prepared material. Mapping of the elemental composition using energy dispersive X-ray spectroscopy showed the uniform distribution of the inorganic particles inside the polypyrrole matrix. The effect of alpha-Fe2O3 on the structure of the hybrid hydrogel and on the mechanism of charge storage was studied with scanning electron microscopy, cyclic voltammetry, galvanostatic charge-discharge and impedance spectroscopy. The specific capacitance was found to increase from 250 F g(-1) for the polypyrrole hydrogel up to 509 F g(-1) for the alpha-Fe2O3-doped hydrogel at the current density of 0.2 A g(-1). The hematite incorporation also affected the morphology of the hydrogel leading to a slight increase in the double-layer capacitance accompanied with a strong increase in the pseudocapacitance: from 239 F g(-1) up to 486 F g(-1). The initial polypyrrole hydrogel and the hybrid hydrogel demonstrated a capacitance retention of about 75% and 79% after 3000 charge-discharge cycles at the current density of 4 A g(-1), respectively.