Pure and Co substituted ZnO nano crystalline particles were prepared by solution combustion technique using l-Valine as a fuel. As synthesized powder samples were characterized by X-ray diffractometer and SQUID magnetometer to confirm the formation of single phase wurtzite structure and to study the bulk magnetic response of the sample, respectively. Magnetic studies show that Co doped ZnO nanoparticles exhibit ferromagnetism (FM) at room temperature (RT). Furthermore, the electronic structure and element specific magnetic properties were investigated by near-edge X-ray absorption fine structure (NEXAFS) and X-ray magnetic circular dichroism (XMCD) measurements, respectively. The effect of Co substitution on the spectral features of Co-ZnO at O K-edge, Co L 3,2 edge, Zn L3,2 edge have been investigated. The spectral features of NEXAFS at Co L3,2 edge is entirely different from the spectral features of metallic clusters and other impurity phases, which rules out the presence of impurity phases. The valence state of 'Co' ion is found to be in +2 state. The FM nature of the sample was confirmed through XMCD spectra, which is due to the incorporation of divalent 'Co' ions. Hence the presented results confirm the substitution of 'Co' ions at 'Zn' site in the host lattice, which is responsible for the RTFM. © 2014 Elsevier B.V.