In this study, we report on the optical and magnetic properties of Co-doped ZnO nanoparticles with increasing Co-content (CoxZn1−xO; x = 0.000, 0.005, 0.010, 0.030, 0.050, 0.070, and 0.100) synthesized by the combustion reaction method. The X-ray diffraction patterns and the Raman spectra of all samples indicated the formation of the ZnO hexagonal wurtzite phase (space group C46V). The Raman data also show the formation of a secondary Co3O4 phase, which is barely seen in the X-ray spectra. Photoacoustic spectroscopy and electron paramagnetic resonance confirm the presence of the two phases (CoxZn1−xO and Co3O4). Vibrating sample magnetometer measurements performed at room temperature exhibited hysteresis loops, indicating the presence of long-range magnetic ordering in the samples. Analysis of the magnetization as a function of magnetic field and temperature shows that the ferromagnetism in the as-synthesized samples comes from small Co-metallic inclusions, with an estimated radius of about 4.8 nm and blocking temperature around 595 K.