Photoluminescence and photomodulated reflectivity measurements of ZnOSe alloys are used to demonstrate a splitting of the valence band due to the band anticrossing interaction between localized Se states and the extended valence band states of the host ZnO matrix. A strong multiband emission associated with optical transitions from the conduction band to lower E_- and upper E₊ valence subbands has been observed at room temperature. The composition dependence of the optical transition energies is well explained by the electronic band structure calculated using the kp method combined with the band anticrossing model. The observation of the multiband emission is possible because of relatively long recombination lifetimes. Longer than 1 ns lifetimes for holes photoexcited to the lower valence subband offer a potential of using the alloy as an intermediate band semiconductor for solar power conversion applications.