A deeper understanding on the atomic and electronic structure of ZnO material is crucial for explaining, predicting, and optimizing its properties, and to suggest materials for better performance. In this work, we present our first-principle studies of the energy bands associated with Sn impurity in ZnO using supercell models. We find that, due to Sn doping, the conduction band moves to the low-energy region, and the band gap becomes smaller than that of pure ZnO. In terms of the calculated band structures, we are also able to explain qualitatively the measured optical properties of Sn-doped ZnO powders.