ZnO and ZnO thin films doped with different Mg contents （0.81at%,2.43at% and 4.05at%） were fabricated by radio frequency-magnetron sputtering （RF-MS） on glass substrates at 450 ℃. The microstructure, photoluminescence （PL）, optical and electrical properties were investigated. The results show that ZnO and diluted Mg doped ZnO thin films present a hexagonal wurtzite structure with high crystal quality. In the short wavelength side of near band emission （NBE）, a high energy emission band for 0.81at% and 2.43at% Mg doped thin films occurs together with NBE. The increasingly high energy band peak gradually covers the NBE peak with Mg doping increasing to 4.05at%. It is suggested that the energy of the electrons near the substituted Mg2+ increases, and these electrons occupy a higher energy level. However, the energy gap between conduction band and valance band still exists because the electrons energy near the un-substituted Zn2+ does not change. With the increasing doped Mg content, electrons in the higher energy level increase and predominate. Therefore, the reason for the increase in the band gap of Mg doped ZnO thin films can be attributed to the increase in the energy of electrons after Mg doping, together with the Burstein-Moss effect. Incidentally, all films exhibit a high average optical transmission （≥85%）. The optical band gap of Mg doped ZnO thin films increases with the increasing Mg doping content and changes from 3.36 to 3.52 eV. The resistivity of the Mg doped films are 2.2×10-3, 3.4×10-3 and 8.1×10-3 Ω·cm for 0.81at%, 2.43at% and 4.05at% Mg contents, respectively.