MgHx thin films are grown by activated reactive evaporation in a Molecular Beam Epitaxy system fitted with an atomic hydrogen source. During deposition the electrical and optical properties are measured in-situ. The structural properties are determined ex-situ by Atomic Force Microscopy. These measurements confirm the growth of the MgH2 phase, however the presence of 10 vol.% of metallic Mg cannot be prevented. The metallic Mg grains cause an optical absorption edge at 2.0 eV, which has a completely different origin than the observed band gap of MgH2 at 5.6 eV The observed optical spectra can be modelled using an effective medium theory. The Mg hydride films are electrically insulating despite the presence of metallic Mg particles. Upon re-hydrogenation of a de-hydrogenated in-situ grown MgHx thin film, the absorption edge at 2.0 eV disappears and the resistivity decreases to values normally observed for ex-situ hydrogenated films. (C) 2008 Elsevier B.V. All rights reserved.