Transparent magnetic semiconductor Fe0.19Zn0.81O films were prepared on glass substrates by a novel chemical process involving (i) ZnO deposition from an aqueous solution and (ii) the introduction of Fe impurities into the ZnO in another aqueous solution. The former/latter aqueous solutions contain only zinc/iron nitrate and dimethylamine borane as reactants, and the reactions proceeded at low temperatures of 323-333 K under ambient atmosphere. The Fe0.19Zn0.81O film with a characteristic wurtzite structure exhibited high transparency in the visible light region and room-temperature ferromagnetic behavior, as well as a semiconducting feature. Extended X-ray absorption fine structure and soft X-ray magnetic circular dichroism measurements using synchrotron radiation techniques and transmission electron microscopy analyses were performed to clarify the local structure around Fe impurities and the origin of room-temperature ferromagnetism. The incorporated Fe impurities were found to form nanosized zinc ferrite surrounding the hexagonal ZnO grains, and the zinc ferrite had an Fe(A) deficient nonstoichiometry, causing the room-temperature ferromagnetism. (c) 2005 The Electrochemical Society.