Memory and switching devices acquired new materials which exhibit ferroelectric and ferromagnetic order simultaneously. We reported multiferroic behavior in Zn1-yLiyO(0.00≤y≤0.10) nanoparticles. The analysis of transmission electron micrographs confirmed the hexagonal morphology and wurtzite crystalline structure. We investigated p-type conductivity in doped samples and measured hole carriers in range 2.4×1017/cc to 7.3×1017/cc for different Li contents. We found that hole carriers are responsible for long range order ferromagnetic coupling in Li doped samples. Room temperature ferroelectric hysteresis loops were observed in 8% and 10% Li doped samples. We demonstrated ferroelectric coercivity (remnant polarization) 2.5kV/cm (0.11 μC/cm2) and 2.8kV/cm (0.15 μC/cm2) for y=0.08 and y=0.10 samples. We propose that the mechanism of Li induced ferroelectricity in ZnO is due to indirect dipole interaction via hole carriers. We investigated that if the sample has hole carriers ≥5.3×1017/cc, they can mediate the ferroelectricity. Ferroelectric and ferromagnetic measurements showed that higher electric polarization and larger magnetic moment is attained when the hole concentration is larger and vice versa. Our results confirmed the hole dependent coexistence of ferromagnetic and ferroelectric behavior at room temperature, which provide potential applications for switchable and memory devices.