High purity Fe O /ZnO nanocomposites were annealed in air at different temperatures between 100 and 1200 °C to get Fe-doped ZnO nanocrystals. The structure and grain size of the Fe O /ZnO nanocomposites were investigated by X-ray diffraction 2θ scans. Annealing induces an increase of the grain size from 25 to 195 nm and appearance of franklinite phase of ZnFe O . Positron annihilation measurements reveal large number of vacancy defects in the interface region of the Fe O /ZnO nanocomposites, and they are gradually recovered with increasing annealing temperature. After annealing at temperatures higher than 1000 °C, the number of vacancies decreases to the lower detection limit of positrons. Room temperature ferromagnetism can be observed in Fe-doped ZnO nanocrystals using physical properties measurement system. The ferromagnetism remains after annealing up to 1000 °C, suggesting that it is not related with the interfacial defects. © 2010 Elsevier B.V. All rights reserved.