High quality ZnO thin films have been grown on Si (100) substrates with MgO buffer layers. An electron beam evaporation technique was used to grow MgO buffer layer on Si substrates followed by a magnetron sputtering process to deposit Zn films on the MgO-buffered Si substrates, next, a two-step annealing process was employed to oxidize the Zn films to form ZnO. The effects of the annealing temperature on the photoluminescence (PL) and orientation of ZnO nanocrystalline thin films were studied. For ZnO films annealed between 400degreesC and 700degreesC in an O-2 ambient, the quality of the ZrO films was improved with increasing annealing temperature. However, as the annealing temperature was increased to over 800degreesC, the ZnO film under-went a phase transformation from ZnO to a MgxZn1-xO alloy, where the x value in the alloy increased with increasing annealing temperature. The MgxZn1-xO alloy films were characterized by X-ray diffraction (XRD), photoluminescence (PL)and reflection spectra. XRD results show that the MgxZn1-xO alloy films maintain the hexagonal structure with a lattice constant close to that of ZnO. In films with Mg incorporation, intense ultraviolet band edge photoluminescence was observed at room temperature. The photoluminescence (PL) spectra show that MgxZn1-xO alloy has a wide band gap with a large exciton binding energy of 53 meV. The band gap of the MgxZn1-xO alloy shifts to higher energy with increasing annealing temperature. The blue-shift of the fundamental band gap of the alloy annealed at 1000degreesC is estimated to be similar to300meV. (C) 2003 Published by Elsevier Science B.V.