Mg-doped ZnO have considerable interests owing to their unique optical, thermal and structural properties. ZnO and Mg doped ZnO nanoparticles with different doping concentration were prepared by precipitation method. The effect of Mg doping on the crystal structure, morphology and optical properties of the nanoparticles was also investigated. In this paper, we report the Synthesis of Mg-doped ZnO nanoparticles successfully with diameters ranging from 60 to 90nm via precipitation method. The surface morphology of synthesized material was investigated by using scanning electron microscope (SEM). The structure and phases of Mg-ZnO were analyzed by powder X-ray diffraction (XRD) method and the optical properties were measured by using UV–Vis spectrophotometer and photoluminescence spectroscopy.