Ni-doped ZnO nanoparticles having 0%, 2%, 4%, 6%, 8% and 10% of Ni are synthesized by means of low temperature sol-gel (auto-combustion) method. The effects of Ni doping on the structural and optical properties of ZnO:Ni particles in powder sample are investigated using X-ray diffraction (XRD), scanning electron microscopy (SEM), Fourier transform infrared (FUR) spectroscopy, ultraviolet-visible spectroscopy and photoluminescence (PL) spectroscopy. The XRD analyses on Ni doped and undoped samples reveal the formation of single phase, polycrystalline and hexagonal-wurtzite structure. The SEM images show clusters of particles in nanosizes and some particles in the form of thin rods. The FTIR spectra confirm the formation of tetrahedral coordination of the oxygen ions surrounding the zinc ions and a shift in the frequency of bands brings out Ni doping in ZnO. The optical absorption spectra show a shift in the position of band edge towards lower energy. The estimated band gap is found to decrease with higher nickel doping. The room temperature PL measurements illustrate UV emission centered on 392 nm (3.16 eV), which is ascribed to the near-band-edge (NBE) emissions of ZnO, violet emission at 411 nm (3.01 eV) and blue emission at 450 nm (2.75 eV). The cause of decrease in intensity of these emission lines when content of Ni is increased in Ni-doped ZnO nanoparticles is explained on the basis of relative changes in the distribution of radiative and non-radiative defect sites as Ni chooses its sites. The nanoparticles of ZnO:Ni exhibit room temperature ferromagnetic phase in them. (C) 2010 Elsevier B.V. All rights reserved.