Structural, optical, magnetic, and electrical properties of zinc oxide (henceforth, ZO) and iron doped zinc oxide (henceforth, ZOFe) films deposited by sputtering technique are described by means of Rutherford backscattering spectrometry, grazing incidence X-ray diffraction, scanning electron microscope (SEM), UV–Vis spectrometer, vibrating sample magnetometer, and room temperature electrical conductivity, respectively. GIXRD analysis revealed that the films were polycrystalline with a hexagonal phase, and all films had a preferred (002) c-axis orientation. The lattice parameters a and c of the wurtzite structure were calculated for all films. The a parameter remains almost the same (around 3 Å), while c parameter varies slightly with increasing Fe content from 5.18 to 5.31 Å throughout the co-deposition process. The optical gap for undoped and doped ZO was obtained from different numerical methods based on the experimental data and it was increased with the increment of the concentration of Fe dopant from 3.26 eV to 3.35 eV. The highest magnetization (4.26 × 10−4 emu/g) and lowest resistivity (4.6 × 107 Ω·cm) values of the ZO films were found to be at an Fe content of 5% at. %. An explanation for the dependence of the optical, magnetic, and electrical properties of the samples on the Fe concentrations is also given. The enhanced magnetic properties such as saturated magnetization and coercivity with optical properties reveal that Fe doped ZO thin films are suitable for magneto-optoelectronic (optoelectronic and spintronics) device applications.