Bulk samples of Zn1-xFexO (x=0.02 and 0.05) were synthesized via solid state reaction route by sintering in air at 800 o C. Some sintered samples were annealed in Ar/H2 at 800 o C for ~ 5 hrs. X-ray diffraction results reveal that the basic crystal structure of the as sintered and hydrogenated (Ar/H2) samples corresponds to ZnO wurtzite structure together with some traces of ZnFe2O4 in the as sintered and Fe metal in the hydrogenated samples. The as sintered samples of both compositions show paramagnetic behaviour and after hydrogenation they exhibit ferromagnetic interactions at room temperature. Increase in the electrical conductivity has also been observed in the hydrogenated samples. The presence of small Fe clusters in the hydrogenated samples are expected to be responsible for the observed room temperature ferromagnetism.