This paper reports the formation of two-dimensional electron gas 2DEG in rf-sputtered defective polycrystalline MgZnO/ZnO heterostructure via the screening of grain boundary potential by polarization-induced charges. As the MgZnO thickness increases, the sheet resistance reduces rapidly and then saturates. The enhancement of the interfacial polarization effect becomes stronger, corresponding to a larger amount of resistance reduction, when the Mg content in the cap layer increases. Monte Carlo method by including grain boundary scattering effect as well as 2D finite-element-method Poisson and drift-diffusion solver is applied to analyze the polycrystalline heterostructure. The experimental and Monte Carlo simulation results show good agreement. From low temperature Hall measurement, the carrier density and mobility are both independent of temperature, indicating the formation of 2DEG with roughness scattering at the MgZnO/ZnO interface. © 2010 American Institute of Physics.