This paper reports the effect of cobalt doping on ZnO thin films. Undoped and doped films were deposited on corning glass substrates by sol-gel method with different concentration of cobalt (0–10%). X-ray diffraction patterns show the polycrystalline nature of the films with the preferred orientation along c-axis. No other cobalt metal cluster and impurity phases have been observed with Co doping up to 5%. Raman spectra confirms the substitution of Co ion in place of Zn ion, however the films with Co concentration above 5% show peaks at 490cm−1, 525cm−1 and 715cm−1 which can be attributed to the formation of spinel ZnCo2O4 structure. Surface morphology and topography were studied using field emission scanning electron microscope and atomic force microscopy. The X-ray photoelectron spectroscopy results indicate that the Co ions are in +2 charge state in the films. The optical transmittance of Co doped ZnO thin films reduces up to 80% as compared to undoped ZnO thin film in the visible region. The bandgap was found to be increasing in the range of 3.26–3.31eV with Co doping whereas it decreases for higher doping of Co concentration. The M-H and M-T curve confirms the room temperature ferromagnetism in Co doped ZnO thin films.