This study reports the role of temperature on the magnetic properties of the Fe-doped (0, 1, 3, and 5 wt%) ZnO nanoparticles (NPs) synthesized using the facile co-precipitation procedure. Powder x-ray diffraction analysis revealed the crystallinity deterioration of the ZnO matrix on trivalent cationic doping and the shifting of peak position due to the mismatch in ionic radius between the Zn2+ and Fe3+. A clear redshift in the bandgap of the iron-doped ZnO samples is observed from the UV-vis diffused reflectance spectroscopic studies. The existence of lattice defects including the zinc interstitials, zinc vacancies, and oxygen vacancies are confirmed by the room temperature photoluminescence analysis. Scanning electron microscopic investigations showed the synthesized NPs possesses agglomerated spherical morphology. The role of temperature on the magnetization of the iron-doped ZnO nanoparticles has been examined at 300 and 100 K. A 3-fold enhancement of magnetization value perceived for the 5% iron-doped ZnO nanoparticles at 100 K compared to the magnetization value of such sample at 300 K.