Luminescent ZnO and Zn_0.95Mg_00.5O nanorods with length around 0.5 to 3 μm and diameter 100–150 nm were prepared by a facile solvothermal method. On hydriding at room temperature, a change of morphology from nanorods with aspect ratio ~5–10 to particles of sizes ~100 nm has been observed in both ZnO and Zn_0.95Mg_0.05O. While hydrided Zn_0.95Mg_0.05O showed an enhanced defect related green emission, the same got suppressed in hydrided ZnO. Even though it is observed that zinc vacancies are present in both as prepared ZnO and Zn_0.95Mg_0.05O, luminescence studies indicate that zinc vacancies get stabilized in Zn_0.95Mg_0.05O on hydrogenation.