MgO thin films were deposited on soda lime glass substrates by rf magnetron sputtering using a MgO target at various oxygen flow ratios in order to probe the relationship between MgO film properties and discharge characteristics. MgO films have a tendency to form microstructures with a preferred growth orientation of (200) with increasing oxygen flo ration up to 0.1 $O_2$/(Ar+$O_2$). MgO film obtained at 0.1[$O_2$/(Ar+$O_2$)] was found to be fully stoichiometric. The stoichiometric MgO film was observed to have relatively very clean surface and grains of large size and contain almost no hydroxyl group. The AC PDP with fully stoichiometric MgO film showed lower firing and sustain voltages than those with magnesium-rich or oxygen-rich MgO films, being largely attributed to the larger grain size and the minimized hydroxyl group.