We have studied structural, electrical, and optical properties of sputter deposited ternary CdMgO alloy thin films with total Mg concentration as high as 44%. We found that only a fraction (50%–60%) of Mg is incorporated as substitutional Mg contributing to the modification of the electronic structures of the alloys. The electrical and optical results of the Cd1−xMgxO alloys are analyzed in terms of a large upward shift of the conduction band edge with increasing Mg concentration. With the increase of the intrinsic bandgap, appropriately doped Cd-rich CdMgO alloys can be potentially useful as transparent conductors for photovoltaics.