A simple one-step microwave-assisted combustion method using urea as a fuel, was applied to develop the nanophase powders of ((Zn1-2xCexCox) O (x = 0.00, 0.01, 0.02, 0.03, 0.04, and 0.05)). The results emphasize that by changing the codopant concentration it is feasible to fine-tune structural, morphological, optical and magnetic properties. The synthesized nanoparticles gave rise to new microstructures without changing the basic hexagonal wurtzite structure. The substitution of Ce and Co into ZnO lattice was confirmed from the shift in XRD peaks position, changes in peaks intensity, and cell parameters. Energy dispersive X-ray spectra confirmed the presence of Ce and Co within ZnO system; the weight percentage was close to their nominal stoichiometry. Ultraviolet-visible (UV-Vis) spectroscopy analysis indicated that the optical band gap decreased with the increase of Ce and Co codoping concentration. It is clear from SEM images that the average particles size decreased from 50 nm to 25 nm when codoping concentration was increased up to 0.05 M. Photoluminescence spectra exhibited the emission bands in ultra-violet and blue-green regions. Magnetization-Field (M-H) hysteresis loops revealed that the codoped nanopowders exhibited room temperature ferromagnetism (RTFM). Using first principles calculations, based on density functional theory, electronic and magnetic properties of codoped ZnO for different dopants concentration, were predicted. It is found that the observed RTFM is originated mainly from spin polarization of Co-d orbital, Ce-f orbital has partial contribution. © 2014 Elsevier B.V. All rights reserved.