Polycrystalline Fe doped ZnO nanoparticles were synthesized through citrate gel method. Microstructural studies were carried out using XRD, FESEM, EDS, TEM, SAED and FTIR spectroscopy. XRD and TEM results clearly show the formation of all samples in single phase without any impurity and the average crystallite size has been observed to vary between 10 nm and 20 nm. Band at 500 cm(-1) observed in FTIR spectrum is attributed to the Zn-O stretching confirms the formation of ZnO nanoparticles. The dielectric constant, loss tangent and ac conductivity were studied as a function of frequency and composition using LCR meter. All the dielectric parameters show dispersion and decreases with increase in Fe content. The observed dielectric behavior is explained on the basis of Maxwell-Wagner model and Koops phenomenological theory. The impedance analysis shows only one semicircle of all samples suggesting that the contribution of grain boundaries is dominated over grain contribution. (C) 2012 Elsevier Ltd. All rights reserved.