The effect of different annealing temperatures on structural, optical and magnetic properties of ZnFe2O4 nanoparticles prepared using the coprecipitation technique has been investigated. With the increase in annealing temperature, crystallinity and average crystallite size of nanoparticles increased. The average crystallite size was found to be 5.55 nm, 6.62 nm and 32.9 nm for the samples annealed at 300 °C, 500 °C and 700 °C, respectively. The X-ray diffraction and Fourier-transform infrared spectroscopy revealed the formation of a cubic spinel structure. The optical direct and indirect bandgap energy decreased with an increase in annealing temperature. The saturation magnetization increased from 16.38 emu/g to 25.91 emu/g. The M–H curves depicted the magnetic phase transition from superparamagnetic to ferrimagnetic. The electrical properties were investigated using an impedance analyzer in the frequency range of 300 Hz to 1 MHz. The conduction properties showed enhancement with increased annealing. The humidity sensing properties were investigated in the range of 15–90% RH and revealed a strong dependence of adsorption capacity on the annealing temperature. Electrical conductivity improved with increased humidity. Excellent humidity sensitivity was observed for ferrites annealed at 700 °C attributed to increased crystallinity and reduced lattice strain making them a potential candidate for use in humidity sensors.