A review is given for the recent progress of research in the field of oxide-based diluted magnetic semiconductor (DMS), which was triggered by combinatorial discovery of transparent ferromagnet. The possible advantages of oxide semiconductor as a host of DMS are described in comparison with conventional compound semiconductors. Limits and problems for identifying novel ferromagnetic DMS are described in view of recent reports in this field. Several characterization techniques are proposed in order to eliminate unidentified ferromagnetism of oxide-based DMS unidentified ferromagnetic oxide (UFO). Perspectives and possible devices are also given. (C) 2003 Published by Elsevier B.V.