We report the results from structural, electrical and magnetic measurements on Gd-implanted ion beam deposited zinc oxide (ZnO) films. 40 keV Gd ions were implanted into 150 nm thick ZnO films with fluence 2.8 x 10(15) cm(-2). RBS spectra reveal the implanted atoms are located in the near-surface region in as-implanted and up to 923 K annealed films, diffusing deeper into the films after 1073 K annealing. SEM images show that the average grain size increases from 10 to 30 nm upon annealing. High-resolution and energy-filtered transmission electron microscopy of a ZnO: Gd sample annealed at 923 K reveal the presence of Gd-rich regions in the film, but no evidence of pure Gd precipitates. Annealing increases the resistivity, and the carrier concentration decreases by as much as six orders of magnitude after annealing at up to 1073 K. All annealed films display a mix of paramagnetic, superparamagnetic and ferromagnetic behaviour extending to temperatures above 300 K that we attribute to the spatially inhomogeneous Gd distribution. The paramagnetic behaviour can be attributed to isolated Gd moments, while the ordered magnetic phases appear to arise from Gd-rich regions within the ZnO. X-ray absorption near edge spectroscopy provides evidence that there exist oxygen vacancies.