Ni- and Co-substituted ZnO nanoparticles were synthesized using forced hydrolysis of acetate metallic salts in a polyol medium. The X-ray diffraction patterns show a hexagonal wurtzite structure (space group P63mc). The characteristic absorption bands of UV-vis-IR spectra are correlated with the d-d transitions of tetrahedrally coordinated Co2+ and Ni2+ ions in octahedral and tetrahedral sites. The photoluminescence spectra exhibited a typical ZnO UV-exitonic emission band around 380 nm and a broad band between 400 and 500 nm that might be ascribed to the intrinsic defects in the ZnO material. The transmission electron microscopy displays spherical particles with a diameter between 20 and 30 nm. The magnetic measurements reveal that Zn1-xNixO and Zn1-xCoxO nanoparticles show, respectively, ferromagnetic and paramagnetic behavior at 5 K. Homogeneous distributions of Co and Ni ions in the particles observed by filter imaging analysis indicates that there is no evidence of Co or Ni metal throughout the powders.