We demonstrate structural and room temperature magnetic properties of Fe doped ZnO nanofibers (NFs) obtained by electrospinning followed by calcination. The observed NFs, formed from crystalographically oriented, approximately 4.5 nm particles conglomerates, were approximately 200 nm in diameter. The reported synthesis of room temperature ferromagnetic Fe doped ZnO NFs is both facile and economical, and is therefore suggested as a generic method of fabricating biocompatible magnetic materials. The major substrates selected for the NFs synthesis (Zn, Fe) comprised of relatively low toxicity materials. Incorporating 10% Fe into ZnO does not modify the wurtzite crystal structure of the host material. No evidence of impurity phase was detected by either X-ray or electron diffraction. Magnetometry studies and Magnetic Force Microscopy imaging reveal a local ferromagnetic order that persists up to room temperature. We suggest that the observed phenomenon is either due to a mechanism mediated by presence of oxygen vacancies and/or is related to iron-rich precipitates.