Li-doped p-type ZnO was fabricated by heat treatment of Zn–Li alloy film with 2 at% Li on a quartz substrate in N2 flow at 500 °C for 2 h, and then in O2 flow at 700 °C for 1 h. The room-temperature resistivity was measured to be 678.34 Ω cm with a Hall mobility of 1.03 cm2 V−1 s−1 and a carrier concentration of 8.934 × 1015 cm−3. Three emission peaks centred at 3.347, 3.302 and 3.234 eV are observed in the photoluminescence spectrum measured at 12 K and are due to neutral acceptor-bound exciton emission, conduction band to acceptor level transition and donor–acceptor pair recombination emission, respectively. The p-type conduction of the Li-doped ZnO may be attributed to the formation of a LiZn–N complex acceptor. The optical level of the acceptor is estimated to be about 137 meV. The mechanism of formation of the Li-doped p-type ZnO is discussed in the present work.