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Microstructure of ZnO:Mn films with various Mn concentration was investigated with XANES and XPS. The experimental results revealed a substitution of Mn in ZnO and also excluded the existence of Mn oxides or metallic manganese clusters. The substitutional Mn presented a divalent state and all the ZnO:Mn films were n-type. Room temperature ferromagnetism monotonously decreases with the decrease of the electron carrier concentration. The observed ferrmagnetism should come from the carrier-mediated exchange.