We study strong correlation effects in topological insulators via the Lanczos algorithm, which we utilize to calculate the exact many-particle ground-state wave function and its topological properties. We analyze the simple, noninteracting Haldane model on a honeycomb lattice with known topological properties and demonstrate that these properties are already evident in small clusters. Next, we consider interacting fermions by introducing repulsive nearest-neighbor interactions. A first-order quantum phase transition was discovered at finite interaction strength between the topological band insulator and a topologically trivial Mott insulating phase by use of the fidelity metric and the charge-density-wave structure factor. We construct the phase diagram at T=0 as a function of the interaction strength and the complex phase for the next-nearest-neighbor hoppings. Finally, we consider the Haldane model with interacting hard-core bosons, where no evidence for a topological phase is observed. An important general conclusion of our work is that despite the intrinsic nonlocality of topological phases their key topological properties manifest themselves already in small systems and therefore can be studied numerically via exact diagonalization and observed experimentally, e.g., with trapped ions and cold atoms in optical lattices.