Fe-doped ZnO (Zn_0.99Fe_0.01O) powders are successfully prepared by ball milling with different milling time, and are investigated using X-ray diffraction (XRD), scanning electron microscope (SEM), ultraviolet-visible (UV-VIS) spectroscopy, vibrating sample magnetometer (VSM) and electron paramagnetic resonance (EPR) spectroscopy. The structural analysis using XRD reveals that the Fe-doped ZnO milled at different milling time can crystallize in a wurtzite structure, and in the XRD patterns, the secondary phase related to Fe cluster with the sensitivity of the XRD instrument can not be found. The SEM image of the sample milled for 24 h shows the presence of spherical nanoparticles. From the optical analysis, the optical band gap is found to decrease with increasing the milling time, which indicates the incorporation of Fe²⁺ ions into the ZnO lattice. The magnetization measurement using VSM reveals that the nanoparticles exhibit ferromagnetic behavior at room temperature, and the magnetization increases gradually with increasing the milling time. The conclusion is further confirmed by the electron paramagnetic resonance of the nanoparticles examined at room temperature, which shows an intense and broad ferromagnetic resonance signal related to Fe ions.