Abstract : Powders of cadmium oxide codoped with Gd and Al ions were synthesised by thermal de-composition method. The mass ratio of Al/Cd in powder form samples was maintained constant, while the mass ratio of Gd/Cd was varied systematically. The final purpose of the present study was to synthesis powders having appreciable room temperature ferromagnetic (RT-FM) properties. To achieve this task, amounts from each synthesised powder were treated in hydrogen atmosphere in order to study its effect on the physical properties, especially the magnetic properties of the samples. The X-ray fluorescence (XRF) and X-ray diffraction (XRD) measurements confirm the purity of the as-prepared powders and the formation of a mono-phase nano-crystalline structure. Thus, the Gd and Al ions incorporated into host CdO lattice formed substitutional solid solutions (SSS). The magnetic properties of the as–prepared and hydrogenated powders were investigated as a function of % Gd doping level. It was observed that the magnetic behaviour of pure CdO transforms from diamagnetic to paramagnetic with doping by Al and Gd ions. More importantly, it was found that the treatment in hydrogen atmosphere stimulates the conversion of some CdO forming Cd metal nano-grains, resulting in transformation to ferromagnetic behaviour. For hydrogenated CdO powder doped with 3% Gd, the coercivity (Hc), remanence (Mr), and saturation magnetization (Ms) were 195.9 Oe, 0.77 memu/g, 5.1memu/g, respectively. Therefore, it was proved, for the first time, the possibility of manufacturing CdO with stable RT-FM by doping and post treatment under hydrogen atmosphere, thus a new potential candidate to be used as a dilute magnetic semiconductor (DMS).