The present work describes modification in physical properties of Zn0.95Mn0.05O films by ion beam irradiation. Films were prepared by spin coating and annealed at 500 °C. XRD patterns of these films show wurzite structure with good crystalline quality. However, Low energy irradiation could modify and induces new defect states. Characterization of those defects had been performed by analysing the UV-Visible absorption spectroscopy and Photoluminescence (PL) spectroscopy. Room temperature PL emission of Zn0.95Mn0.05O film shows a broad UV emission and pronounced visible emission ∼530 nm. At low temperature broad UV band become more prominent however it is completely quenched after irradiation. For all irradiated films we had notice only visible emission of comparable intensities, confined within the region 475 nm to 550 nm. Irradiated films are showing ferromagnetism at room temperature and most importantly the film irradiated at fluence F: 1016 ions cm−2 exhibit maximum saturation magnetic moment of 0.83 emu g−1. The magnetic response is strongly influenced by irradiation and we could say that magnetism is strongly correlated with intrinsic defects present in these films. Defect induced formation of bound magnetic polarons (BMP) actually control the ferromagnetic property of these films. These transparent ferromagnetic films could be used in optoelectronics.