Nano-size ZnO embedded in SiO2 layers were grown by radio-frequency magnetron sputtering. Absorption spectra and PL spectra were employed to study the optical character of the samples at room temperature. Absorption spectra blue-shifted when the size of nano-meter ZnO decreased, which indicated that quantum size effect became stronger with decreasing the size of ZnO. PL spectra show two peaks at about 387 and 441 nm, respectively. It was concluded that the UV emission originates from the radiative recombination of free-exciton, and the blue emission is due to the electron transition from donor levels of oxygen vacancies to the top of valence band. The origin of the two peaks is demonstrated by time-resolved spectra and luminescence decay curve.