The structure, electrical, and magneto-optical properties of as-grown and hydrogenated annealed Ni:ZnO nanorods (NRs) have been systematically investigated. X-ray absorption spectroscopy shows that most of the Ni dopants were incoporated in the ZnO matrix. Noticeable magneto-optical effect together with room temperature ferromagnetism were observed in Ni:ZnO NRs. A broad optical magnetic circular dichroism (OMCD) spectra with larger amplitude is observed for the hydrogenated annealed Ni:ZnO NRs, while nonmagnetic state and no OMCD feature was observed in ZnO NRs. The enhancement in magnetization and OMCD singal are highly related to the oxygen vacancies due to hydrogenated annealing.