The structural, electronic, and magnetic properties of Zn0.95Co0.05O, Zn0.95Fe0.05O, and Zn0.90Fe0.05Co0.05O nanoparticles prepared by a sol-gel method are presented and discussed. X-ray diffraction and optical analysis indicated that high spin Co2+ ions substitute for the Zn2+ ions in tetrahedral sites. 57Fe Mössbauer spectroscopy showed the presence of isolated paramagnetic Fe3+ ions in both Fe doped and Fe+Co co-doped ZnO, however, no evidence of ferromagnetically ordered Fe3+ ions is observed. In the Zn0.95Fe0.05O sample, weak presence of ZnFe2O4 was detected as an impurity phase, whereas Zn0.90Fe0.05Co0.05O was impurity-free within detection limit in all those measurements. Results of these studies suggest that Fe and Co ions in the Fe+Co co-doped sample has a strong synergistic effect because they eliminated the presence of impurities and gave the strongest ferromagnetic signal. Possible role of charge transfer ferromagnetism involving mixed valence ions is considered as a potential mechanism in these nanoparticles. Presence of both Co2+ and Fe3+ might promote more efficient charge transfer in the co-doped Zn0.90Fe0.05Co0.05O, leading to the enhanced ferromagnetism observed in this sample. However, more evidence is necessary to confirm the role of charge transfer ferromagnetism.