This paper reports the characterization of sol–gel derived HfxMg0.05Zn0.95−xO(x=0, 0.025, 0.05, 0.1) thin films. The films show high transparency (∼90%) in the visible light wavelength region. The incorporation of Hf in the thin films increases the bandgap and decreases the crystallinity in the as-deposited films. This may be due to the high bandgap of HfO2 and the crystal frustrating effect caused by mixing atoms of different sizes. As the annealing temperature increases, the bandgap changes because of the alteration of the stress status, grain growth, and atomic rearrangement. The resistivity also decreases slightly with an increase in the annealing temperature.