MgO thin films, which are generally deposited by e-beam evaporation, are widely used as a protecting layer on the dielectric layer of alternating current plasma display panels (AC-PDPs). Its properties are quite sensitive to the evaporation and post-treatment conditions. However, the key factors affecting the discharge characteristics are not well known. This study examines the relationship between the microstructure of the MgO protecting layer and the discharge characteristics of AC-PDPs. MgO thin films were deposited using three different e-beam evaporation sources: single crystal, melted polycrystalline, and sintered polycrystalline MgO. In the case of a constant deposition rate, MgO thin films deposited with three sources had different densities and preferred orientations. However, the MgO thin films deposited at a constant emission current had similar surface morphologies and densities, regardless of the evaporation sources. This can be explained by the mobility of the adatoms on the surface of the MgO films because the mobility of an adatom is strongly dependent on the emission current. As a result of the discharge characteristics observed, this study found that MgO thin films with relatively higher density, triangle-shaped, and columnar grains had the best discharge characteristics.