In this study, we report on the successful synthesis and characterization (structural, optical, and magnetic properties) of GdxZn1-xO nanoparticles (x = 0.000, 0.005, 0.010, 0.030, 0.050, 0.075, and 0.100). Synthesis was carried out using the polymer precursor method (Pechini's method). X-ray diffraction patterns (XRD), FTIR and Raman spectra of all samples indicated the formation of the hexagonal wurtzite phase. No evidence of impurity phases was detected for samples with x ≤ 0.050. Additionally, analysis of the XRD data showed that the increase of the Gd-doping content leads to a tendency of particle size decrease, which is in good agreement with the observed transmission electron microscopy (TEM) micrographs. The UV–Vis spectra showed that the incorporation of Gd3+ ions leads initially (for x ≤ 0.030) to a decrease and later on (for x > 0.030) in a reopening of the GdxZn1-xO band gap. Magnetic measurements showed the coexistence of ferromagnetic (FM) and paramagnetic (PM) phases for the x = 0.010 sample at room temperature. However, for x > 0.010, only a PM phase is observed, which was attributed to the presence of intrinsic defects, such as oxygen vacancies. These defects may have their content increased by the insertion of low levels of Gd. The magnetic data (χ(T) and M(H)) were successfully fitted by the Curie-Weiss and Brillouin modified models, which showed the existence of antiferromagnetic (AF) interaction between Gd3+ ions.