Hybrid bulk heterojunction solar cells based on nanocrystalline TiO2 (nc-TiO2) nanorods capped with trioctylphosphine oxide (TOPO) and regioregular poly(3-hexylthiophene) (P3HT) are processed from solution and characterized in order to relate the device function (optical absorption, charge separation, and transport and photovoltaic properties) to active-layer properties and device parameters. Annealing the blend films is found to greatly improve the polymer–metal oxide interaction at the nc-TiO2/P3HT interface, resulting in a six-fold increase of the charge separation yield and improved photovoltaic device performance under simulated solar illumination. In addition, the influence of the organic ligand at the nc-TiO2 particle surface is found to be crucial for charge separation. Ligand-exchange procedures applied on the TOPO-capped nc-TiO2 nanorods with an amphiphilic ruthenium-based dye are found to further improve the charge-separation yield at the polymer–nanocrystal interface. However, the poor photocurrents generated in the hybrid blend devices, before and after ligand exchange, suggest that transport within or between nanoparticles limits performance. By comparison with other donor–acceptor bulk heterojunction systems, we conclude that charge transport in the nc-TiO2:P3HT blend films is limited by the presence of an intrinsic trap distribution mainly associated with the nc-TiO2 particles.