The optical and structural properties of mixed ZnO/MgO particles prepared by solution techniques are investigated by the cathodoluminescence and electron microscopy techniques. The samples annealed at 400-1000 degreesC show well crystalline wurtzite structure of the ZnO (MgZnO) particles with the size in range of 10-100 nm. Annealing at high temperatures (>700 degreesC) leads to Mg diffusion in ZnO and MgxZn1-xO alloy formation. The blue shifts of the near-band-edge emission as a result of the alloy band gap widening and quantum confinement effect for the small size particles are demonstrated. (C) 2004 Elsevier B.V. All rights reserved.