In this work we investigate the dependence of UV photocurrent of ZnO thin films on the presence of ambient oxygen. Comparative studies were carried out for undoped, Mg-doped and Al-doped ZnO thin films deposited by the sol-gel process. The photocurrent generated by UV excitation was observed to increase sharply under vacuum conditions compared to that measured in an air ambience. The undoped and Al-doped ZnO samples also showed extremely long persistent photocurrent under vacuum conditions, which reduced only when oxygen was reintroduced. This has been linked to surface adsorption of ambient oxygen which traps free electrons under atmospheric conditions, reducing the photocurrent levels. On UV excitation under vacuum the oxygen is irreversibly desorbed, leading to an increase in free electrons, and hence of photocurrent. Mg-doped ZnO thin films however did not show such effects, indicating that UV excitation induced oxygen de-trapping is retarded in these samples. These results were correlated with photoluminescence and optical absorption measurements. Presence of long band-tails was observed for undoped and Al-doped samples, which was absent for Mg-doped films. Additionally, room temperature photoluminescence spectra from undoped and Al-doped samples show multiple near band-edge peaks, which are eliminated by Mg doping. Since Mg doping leads to a larger grain size as determined by the width of the X-Ray Diffraction peaks, we postulate that both the optical properties are affected by the presence of defect states linked to grain boundaries in these materials. We believe that our photocurrent transients are related to UV-induced out-diffusion of oxygen from grain boundaries, and are influenced by the relative magnitude of the O-Mg and O-Zn bonds.