Magnetic semiconductors with coupled magnetic and electronic properties are of high technological and fundamental importance. Rare-earth elements can be used to introduce magnetic moments associated with the uncompensated spin of 4f-electrons into the semiconductor hosts. The luminescence produced by rare-earth doped semiconductors also attracts considerable interest due to the possibility of electrical excitation of characteristic sharp emission lines from intra 4f-shell transitions. Recently, electroluminescence of Eu-doped GaN in current-injection mode was demonstrated in p-n junction diode structures grown by organometallic vapour phase epitaxy. Unlike most other trivalent rare-earth ions, Eu(3+) ions possess no magnetic moment in the ground state. Here we report the detection of an induced magnetic moment of Eu(3+) ions in GaN which is associated with the (7)F(2) final state of (5)D(0)→(7)F(2) optical transitions emitting at 622 nm. The prospect of controlling magnetic moments electrically or optically will lead to the development of novel magneto-optic devices.