The microstructure and microanalysis of Yb3+ and Li+ co-doped ZnO has been studied using scanning electron microscopy (SEM) and transmission electron microscopy (TEM). Co-doping ZnO with Li+ and Yb3+ by solid state reaction method produces a new LiYbO2 phase. Formation of the LiYbO2 is intermediated by ZnO. Nucleation and growth of LiYbO2 occur at ZnO surfaces and at grain boundaries. It is also found that the LiYbO2 particle is strongly bonded to the ZnO subtract, and thus a reaction (or diffusion) zone is likely to exist between LiYbO2 and ZnO. The diffusion region may then accommodate a large amount of Yb3+ and Li+ ion in the ZnO. (C) 2013 Elsevier B.V. All rights reserved.