Co doped CdTe powder samples were prepared by solid-state reaction method. In the present work effect of Co doping on structural, optical, and magnetic properties has been studied. X-ray diffraction studies confirm zinc blend structure for all the samples. The lattice parameter showed linear increase with the increase in Co content. The elemental constituents were characterized by EDAX. Optical studies showed the increase in band gap with increase in Co level. The samples were diluted magnetic semiconductors and exhibited clear hysteresis loop showing room temperature ferromagnetism as confirmed by vibrating sample magnetometer.