Structural, optical and room temperature magnetic properties of Mn-doped MgO nanoparticles with Mn fractions (5-50 at.%), were investigated. The as-prepared pure MgO, with grain size of about 15 nm, exhibits two magnetization components, one is diamagnetic and another is superparamagnetic. After removing the diamagnetic contribution, the magnetization curve exhibits superparamagnetic behavior which may be attributed to vacancy defects. As the Mn content increases, the lattice parameter decreases, the ferromagnetism appears and the emission bands were considerably blue shifted. First principle electronic structure calculations reveal the decrease of both the gap and the Curie temperature with increasing Mn concentration. The obtained results suggest that both Mn doping and oxygen vacancies play an important role in the development of room temperature ferromagnetism. (C) 2013 Elsevier B.V. All rights reserved.