Cobalt-doped ZnTe (Co:ZnTe) polycrystalline powders with different Co concentrations (0%, 3%, 5% and 8%) are prepared by solid state reaction method with an aim to study their dilute magnetic semiconducting behaviour. The effect of Co doping on the structural, optical and magnetic properties of the synthesized samples are investigated. The phase and crystallinity of Co:ZnTe powders are studied through X-ray diffraction and Raman spectroscopy. The surface morphology has been analysed through scanning electron microscopy. The chemical environment of the dopant in the host lattice is analysed through X-ray photoelectron spectroscopy. The optoelectronic properties of Co:ZnTe powder samples are evaluated through diffuse reflectance spectroscopy and photoluminescence spectroscopy. The ferromagnetic behaviour of the samples has been investigated at room temperature by the vibrating sample magnetometer. The origin of magnetism in ideal Co:ZnTe bulk system has been analysed through ab initio density functional theory. © 2020, Springer Science+Business Media, LLC, part of Springer Nature.