Room temperature ferromagnetism is observed in pristine SnO₂ nanoparticles prepared via sol–gel method. Microstructural studies with XRD and Raman reveal the coexistence of SnO and SnO₂ phases in vacuum annealed SnO₂. Electron paramagnetic resonance (EPR) results confirm the presence of paramagnetic trapped hole in lattice oxygen atoms and superoxide radical species in air and vacuum annealed SnO₂. It is observed that growth conditions have significant influence on the magnetism of the nanoparticle. Air and vacuum annealed SnO₂ display clear ferromagnetic behavior at room temperature. However, the saturation magnetization decreases in vacuum annealed SnO₂. We have compared the experimental results with ab initio density functional calculations and observed that the Sn vacancies are the main reason of magnetism in SnO₂. The pattern of theoretical formation energy values shows that it is easier to form Sn vacancies in SnO₂ under O rich limit (similar to air annealing). This is in conformity with the experimentally determined higher saturation magnetization values in air annealed SnO₂. The spin polarization of lattice oxygen atoms by the presence of Sn vacancy gives rise to magnetism.