Zn1−x Cr x O nanoparticles with x = 0.0, 0.01, 0.03 and 0.05 were synthesized by the sol–gel technique. Powder X-ray diffraction (XRD) studies reveal that chromium (Cr) incorporates into the ZnO crystal lattice without disturbing the parent hexagonal (wurtzite) structure. Transmission electron microscopy (TEM) measurements show that the average size of these nanoparticles is in the range 15–25 nm. Optical absorption studies show that the band gap of ZnO nanoparticles varies with Cr doping. Photoluminescence (PL) studies depict the presence of defects in Cr-doped nanoparticles. Undoped ZnO exhibits diamagnetic behavior while Cr-doped ZnO samples exhibit weak ferromagnetism to anti-ferromagnetism depending on the Cr content.