Polycrystalline MgxZn1-xO (MZO) thin films on glass substrates were prepared by sol-gel method. All the films retained the hexagonal wurtzite structure of ZnO. The band gap values determined from transmission spectra were found to be smaller than the values obtained from Vegard's law for the as-deposited MZO films. For the films with x = 0.1, 0.2 and 0.3, the band gap blue-shifted initially and then red-shifted with increase in the annealing temperature. The reason for this anomalous shift in the band gap is attributed to the proper substitution of Mg atoms into the Zn lattice sites after a certain critical annealing temperature. © Springer Science+Business Media, LLC 2009.