Hexagonal CdS and Fe-doped CdS nanorods were synthesised by a facile hydrothermal method and characterised by X-ray diffraction, energy dispersive X-ray spectroscopy, UV-vis absorption, photoluminescence, and X-ray photoelectron spectroscopy. The magnetic properties of undoped and Fe-doped CdS nanorods were investigated at room temperature. The experimental results demonstrate that the ferromagnetism of the Fe-doped CdS nanorods differs from that of the undoped CdS nanorods. The remanence magnetisation (M r) and the coercive field (H c) of the Fe-doped CdS nanorods were 4.9 × 10 −3 emu/g and 270.6 Oe, respectively, while photoluminescence properties were not influenced by doping. First-principle calculations show that the ferromagnetism in Fe-doped CdS nanocrystal arose not only from the Fe dopants but also from the Cd vacancies, although the main contribution was due to the Fe dopants.