ZnO nanostructures were synthesized through arc discharge of zinc electrodes in deionized (DI) water. X-ray diffraction (XRD) analysis of the prepared nanostructures indicates formation of crystalline ZnO of hexagonal lattice structures. Transmission electron microscopy (TEM) images illustrate rod-like as well as semi spherical ZnO nanoparticles with 15–20 nm diameter range, which were formed during the discharge process with 5 A arc current. The average particle size was found to increase with the increasing arc current. X-ray photoelectron spectroscopy (XPS) analysis confirms formation of ZnO at the surface of the nanoparticles. Surface area of the sample prepared at 5 A arc current, measured by BET analysis, was 34 m2/g. Photodegradation of Rhodamine B (Rh. B) shows that the prepared samples at lower currents have a higher photocatalytic activity due to larger surface area and smaller particle size.