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Abstract: We investigate using density functional theory (DFT) the electronic structure of (∼3%) Co-doped ZnO in the presence of native n-type donor defects such as VO and ZnI. In particular, we apply a pseudopotential-based self-interaction correction (pseudo-SIC) scheme as an improvement to the local spin-density approximation (LSDA). This overcomes major short comings of the LSDA in describing Co-doped ZnO. Donor+dopant pair complexes such as Co–VO and Co–ZnI are studied as relevant magnetic centres for long-range magnetic interactions at low-dopant concentrations. We find that complex formation is energetically favourable but the inter-complex magnetic coupling is too weak to account for room temperature ferromagnetism in ZnO:Co [Copyright &y& Elsevier]