Indium-tin-oxide (ITO) (In0.95Sn0.05)2O3 and Cr doped indium-tin-oxide (In0.90Sn0.05Cr0.05)2O3 nanoparticles were prepared using simple low cost solid state reaction method and characterized by different techniques to study their structural, optical and magnetic properties. Microstructures, surface morphology, crystallite size of the nanoparticles were studied using X-ray diffractometer (XRD), field emission scanning electron microscope (FE-SEM). From these methods it was found that the particles were about 45 nm. Chemical composition and valence states of the nanoparticles were studied using energy dispersive analysis of X-rays (EDAX) and X-ray photoelectron spectroscopy (XPS). From these techniques it was observed that the elements of indium, tin, chromium and oxygen were present in the system in appropriate ratios and they were in +3, +4, +3 and −2 oxidation states. Raman studies confirmed that the nanoparticle were free from unintentional impurities. Two broad emission peaks were observed at 330 nm and 460 nm when excited wavelength of 300 nm. Magnetic studies were carried out at 300 K and 100 K using vibrating sample magnetometer (VSM) and found that the ITO nanoparticles were ferromagnetic at 100 K and 300 K. Where-as the room temperature ferromagnetism completely disappeared in Cr doped ITO nanoparticles at 100 K and 300 K. © 2016 Elsevier B.V.