A 36 MHz surface acoustic wave delay line based oscillator has been used to study the effect of acousto-electric interaction due to photo generated charge carriers in rf sputtered ZnO film under UV illumination (λ = 365 nm, 20–100 μW/cm2). Design aspects for developing a delay line based SAW oscillator are specified. The observed linear downshift in frequency (2.2 to 19.0 kHz) with varying UV intensity (20–100 μW/cm2) is related to the fractional velocity change due to acousto-electric interaction. UV illumination level of 100 μW/cm2 leads to a characteristic frequency hopping behavior arising due to a change in the oscillation criteria, and is attributed to the complex interplay between the increased attenuation and velocity shift.