We are reporting an enhancement in optical properties by changing the structure of Zn0.85Mg0.15O thin films through formation of crystalline hexagonal nanorods. Zn0.85Mg0.15O thin films were deposited on Si (100) substrate using dielectric sputter followed by annealing in oxygen ambient at temperatures of 700, 800 and 900° C for 10 seconds to reduce oxygen vacancies defects. Deposited thin film annealed at 900 °C (sample A) measured highest peak intensity and it was subjected to controlled the hydrothermal bath conditioning for forming hexagonal nanorods. Four samples were dipped in 2 different solutions with variable molar ratio of zinc nitrate hexahydrate and hexamethylentetramine for 2 and 3 hours, respectively. Samples processed in solution 1 (1:1) ratio for 2 and 3 hours were named B and C and those in solution 2 (2:1) were D and E, respectively. Photoluminescence measurement at 18K demonstrates exciton near-band-edge (NBE) emission peak at 3.61eV from Zn0.85Mg0.15O sample A whereas other samples exhibited slight blue shift along with bimodal peaks. The other peak observed at lower energy 3.43eV corresponds to transitions due to presence of ZnO phase in Zn0.85Mg0.15O. All samples compared to sample A exhibited more than 10 times increment in peak intensities with sample B producing the highest (∼ 20 times). Nanorods formation was confirmed using crosssectional SEM imaging. X-ray diffraction measurements revealed that all Zn0.85Mg0.15O samples had (002) preferred crystal orientation with peak position at 34.7°. All nanorods samples measured lower reflectance compared to sample A, indicating high absorption in nanorods due to high scattering of light at the nanorods surface.