Annealed ZnO nanoparticles at 300, 350, 400, 450 and 500 oC in air were prepared by microwave method. The effects of annealing temperature on the structural and optical properties of annealed ZnO nanoparticles by XRD, transmittance spectra, and photoluminescence (PL) were investigated. The XRD revealed the presence of hexagonal wurtzite structure of ZnO average grain size 25.7–36.4nm. The decrease in the vacancy energy levels of annealed ZnO nanoparticles as annealing temperature increases may be attributed to the defects that are in the ZnO nanoparticles. From the UV-Vis spectra, the vacancy energy level was determined and the effect of annealing temperature on the energy level is illustrated. The vacancy energy level of ZnO was found to be 2.25 - 2.37 eV. The PL spectra show that all the samples emit strong UV and very weak violet, blue and green emissions this refers to the high crystal quality of annealed ZnO nanoparticles.