The current study presents the electronic and magnetic properties of monolayer ZrSe2 nanoribbons. The impact of various point defects in the form of Zr or Se vacancies, and their combinations, on the nanoribbon electronic and magnetic properties are investigated using density functional theory calculations in hydrogen-terminated zigzag and armchair ZrSe2 nanoribbons. Although pristine ZrSe2 is non-magnetic, all the defective ZrSe2 structures exhibit ferromagnetic behavior. Our calculated results also show that the Zr and Se vacancy defects alter the total spin magnetic moment with D6Se, leading to a significant amount of 6.34 µB in the zigzag nanoribbon, while the largest magnetic moment of 5.52 µB is induced by D2Se−2 in the armchair structure, with the spin density predominantly distributed around the Zr atoms near the defect sites. Further, the impact of defects on the performance of the ZrSe2 nanoribbon-based devices is investigated. Our carrier transport calculations reveal spin-polarized current-voltage characteristics for both the zigzag and armchair devices, revealing negative differential resistance (NDR) feature. Moreover, the current level in the zigzag-based nanoribbon devices is ∼10 times higher than the armchair devices, while the peak-to-valley ratio is more pronounced in the armchair-based nanoribbon devices. It is also noted that defects increase the current level in the zigzag devices while they lead to multiple NDR peaks with rather negligible change in the current level in the armchair devices. Our results on the defective ZrSe2 structures, as opposed to the pristine ones that are previously studied, provide insight into ZrSe2 material and device properties as a promising nanomaterial for spintronics applications and can be considered as practical guidance to experimental work.