Co doped nanocrystalline ZnO powders (Zn1-xCoxO; 0.03≤x ≤ 0.1) were synthesized by autocombustion technique. The average particle sizes reduce to 40 nm in comparison to the particle sizes of ZnO synthesized by the same technique. The XRD pattern reveals the absence of any secondary phases like Co or oxides of Co. This investigation suggests the possibility of solid solution of Co in ZnO. The 3% Co doped ZnO shows the diamagnetic behavior whereas other percentage of Co doped ZnO upto 10% shows the room temperature ferromagnetic signature with broadening of M∼H loop. The decrease in band gap suggests the Co substitution in ZnO matrix. © 2013 American Scientific Publishers. All rights reserved.