ZnO spheroidal nanoparticles, synthesized by microwave processing, were used for preparation of composites with polyethylene oxide (PEO). The phase purity and crystal structure of the composites were investigated by X-ray diffraction (XRD) and Raman spectroscopy. The composites’ particles morphology and size distributions were studied by FE-SEM and laser diffraction particle size analyzer, respectively. The optical properties were studied using UV–Vis diffuse reflectance and photoluminescence spectroscopy. It is found that in the wavelength range 550–800 nm, ZnO and ZnO/PEO composites absorb about 50% of the incident light intensity. Also red-shift of band gap energy (0.12–0.15 eV) compared to bulk ZnO was determined. The effect of PEO molecular weights, 200,000, 600,000 and 900,000 g/mol, on photocatalytic activity of ZnO/PEO composites were examined via de-colorization of methylene blue (MB) under direct sunlight irradiation. A large efficiency of MB de-colorization was found after 6 h of irradiation. The enhanced photocatalytic activity of ZnO/PEO composites is attributed to the: (1) lattice defects introduced in ZnO crystal structure by rapid microwave processing, and (2) presence of PEO as a source of oxygen interstitials. In order to confirm and further clarify the experimental results ab initio calculations based on density functional theory (DFT) were performed.