Crystal defects in Seeded Chemical Vapour Transport (SCVT) and hydrothermal ZnO substrates were characterised mainly by X-ray topography and diffraction. Zn1-xMxO (M=Co, Mn) epilayers were grown on hydrothermal ZnO(00.1) substrate by Pulsed Laser Deposition (PLD). It is shown that the epitaxy strains are partially relaxed through dislocations in the {10.0} glide planes. The crystal perfection of the epilayers was analysed by high-resolution X-ray diffraction. Almost intrinsic rocking curves were observed for Zn1-xCoxO epilayers and the e-axis parameter increases proportionally with the Co content. This suggests that Co atoms are well located at substitutional sites in the ZnO matrix. A larger distortion of the ZnO matrix is induced by the insertion of Mn atoms. A paramagnetic behaviour was observed in Zn1-xCoxO epilayers with a low proportion of active Co atoms. A weak ferromagnetic behaviour was observed only for Zn1-xCoxO epilayers when a few Al atoms (1.6%) were incorporated. (C) 2004 Elsevier B.V. All rights reserved.