In this work, the deposition of 3-nm dispersed Zinc-Oxide (ZnO) nanislands by thermal Atomic Layer Deposition (ALD) is demonstrated. The physical and electronic properties of the islands are studied using Atomic Force Microscopy, UV-Vis-NIR spectroscopy, and X-ray Photoelectron Spectroscopy. The results show that there is quantum confinement in 1D in the nanoislands which is manifested by the increase of the bandgap and the reduction of the electron affinity of the ZnO islands. The results are promising for the fabrication of future electronic and optoelectronic devices by single ALD step.