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We study room temperature optics and electronic structures of ZnO:Cu films as a function of Cu concentration using a combination of spectroscopic ellipsometry, photoluminescence, and ultraviolet-visible absorption spectroscopy. Mid-gap optical states, interband transitions, and excitons are observed and distinguishable. We argue that the mid-gap states are originated from interactions of Cu and oxygen vacancy (Vo). They are located below conduction band (Zn4s) and above valence band (O2p) promoting strong green emission and narrowing optical band gap. Excitonic states are screened and its intensities decrease upon Cu doping. Our results show the importance of Cu and Vo driving the electronic structures and optical transitions in ZnO:Cu films. [ABSTRACT FROM AUTHOR]