In the present study, pure, Co, Gd, and Co/Gd di-doped ZnO nanoparticles were synthesized via the co-precipitation synthesis route. The prepared samples were characterized through different techniques such as the X-ray diffraction method (XRD), scanning electron microscopy (SEM), UV-Vis spectroscopy, photoluminescence (PL)spectroscopy, and an impedance analyzer and vibrating sample magnetometer (VSM). The XRD pattern shows ZnO’s wurtzite hexagonal crystal structure; moreover, the shifting of characteristic peaks toward the lower angle indicates the inclusion of Co and Co/Gd in the ZnO host lattice. SEM micrographs show various morphologies such as rods, the agglomeration of particles, and spherical nanoparticles. The UV-Vis spectroscopy reveals that the absorption increased in the visible region and there was a substantial redshift for the doped samples. The bandgap decreased from 3.34 to 3.18 eV for the doped samples. The PL spectra show near-edge and inter-band transitions; the origin of inter-band transitions is attributed to the defect states present within the bands. The dielectric constant is strongly frequency dependent and decreases with Co and Co/Gd doping, while the electrical conductivity increases. A VSM study indicates that pure ZnO is diamagnetic, while the Co and Co/Gd doped ZnO nanoparticles showed ferromagnetic behavior. Under UV-visible light irradiation, the Co/Gd-ZnO nanoparticles showed higher photocatalytic activity than the ZnO nanoparticles. The enhanced photocatalytic activity may be attributed to a decreased bandgap with doping.