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The Zn0.94Co0.05Al0.01O diluted magnetic semiconductor (DMS) thin films were made by rf magnetron co-sputtering, and annealed in vacuum at 500°C (for 0, 20, 40, and 80 min, respectively). The films have a single ZnO wurtzite structure with -axis preferred orientations, without any segregated secondary phase, and Co2+ ions substitute tetrahedrally coordinated Zn2+ ions site. The as-grown film is insulating and in a state of tensile stress parallel to the c-axis. After annealing in vacuum, the films have tensile stresses parallel to the (002) plane, and become conductive; moreover, the carrier concentrations increase with increasing the annealing time. The as-grown film possesses the room-temperature ferromagnetism (RTFM) and the saturation magnetization (Ms) is 0.8 μB/Co. As the film is annealed in vacuum, the value of Ms is reduced first then enhanced with the increase of annealing time.