We report on the fabrication of sol-gel derived Eu-doped ZnO films and the effects of heat-treatment on their structural and optical properties. X-ray diffraction data analysis confirms the decrease in strain in the thin films with increasing heat-treatment temperatures, and the compressive stress of the samples is found to become tensile for heat-treatments between 650 °C and 800 °C. X-ray-absorption fine-structure spectra performed at the Eu L3-edge confirm the absence of clustering of Eu-ions. The photoluminescence (PL) spectra of undoped and doped films consist of near-band edge emissions along with the defect state emissions of ZnO. Intense red emission (612 nm) is observed under UV excitation attributed to the D05→F27 energy level transition of Eu3+ ions in the doped films. The elemental composition and the existence of Eu2+ as well as Eu3+ has been discussed with the help of X-ray photoelectron spectroscopy. ZnO → Eu3+ energy transfer has also been confirmed with the help of PL excitation spectra in these transparent ZnO thin films for applications in integrated optic devices operating in the UV–visible region. © 2016 Elsevier B.V.