In this report, the structural and optical properties of sol-gel derived $Mg_xZn_{1-x}O$ thin films upon changes in the composition and annealing temperature were investigated. The $Mg^{2+}$ content and the annealing temperature were varied in the range of $0{leq}x{leq}0.35$ and $400^{circ}C{leq}T{leq}600^{circ}C$, respectively. The films exhibited a hexagonal wurtzite structure of a polycrystalline nature. The optical transmittance exceeded 85% and the optical band gap of the film was tuned as high as 3.84 eV at a value of x = 0.35 (annealed at $400^{circ}C$), which was evidently the maximum $Mg^{2+}$ content for the single-phase polycrystalline $Mg_xZn_{1-x}O$ thin films prepared in this experiment. The optical band gap and photoluminescence emission were tailored to the higher energy side while maintaining crystallinity without a significant change of the lattice constant.