We investigate the structural, electronic and magnetic properties of transition metal (TM = Sc, Ti, V, Cr, Mn, Fe, Co, Ni, and Cu) doped (ZnO) 12 clusters (TMZn 11O 12 and TM 2Zn 10O 12) by using density functional theory approach. All the substitutional doping clusters are of high stability and remain quasi-cage structures with the exception of Ti 2Zn 10O 12 and V 2Zn 10O 12. The doped TMZn 11O 12 clusters are magnetic except TM = Ti, whereas the TM 2Zn 10O 12 clusters are either antiferromagnetic or paramagnetic, suggesting that concentration of TM dopant has great influence on the magnetism of the ZnO-based nanostructures. The magnetic behavior is understood from charge-transfer model and partial density of states.