Nanocrystals of undoped and silver doped zinc oxide (Zn1-x Ag x O (where x = 0.00 to 0.05) were synthesized by coprecipitation method. Crystalline phases and optical absorption of prepared samples were determined by X-ray diffraction and UV-visible spectrophotometer. The average particles size was determined from X-ray line broadening. X-ray analyses reveals that Ag doped ZnO crystallizes in hexagonal wurtzite structure. The incorporation of Ag+ in the place of Zn2+ provoked an increase in the size of nanocrystals as compared to undoped or pure ZnO. Optical absorption measurement indicates red shift in the absorption band edge upon Ag doping. The band gap values of as prepared undoped and doped with silver samples are found to decrease with increase in temperature from 300 to 800 oC.