We report the systematic changes of nano-scaled features and optical properties in a promising transparent oxide material, namely, Al x (x = 0, 1, 2 and 5%) doped ZnO 1-x (AZO). Electron microscopy investigations revealed the alterations at lattice scale depending on the presence of Al-content in ZnO nanostructures. Lattice spacings of 0.26 and 0.28 nm oriented along the (0002) and (101 0) planes, respectively, were attributed to euhedral-and facetted-structures of hexagonal-ZnO. The AZO samples were further characterized by XRD, SEM, UV-vis spectrophotometry, Raman spectroscopy and photoluminescence studies. It has been shown that at a dopant concentration of 2% Al in ZnO, an optimal balance could be achieved between microstructure and optical properties.