The stress state of MgO thin films, which are used as the dielectric protective layer in alternating current plasma display panels (ac-PDP), was measured by a laser scanning method, in which the bending curvature of a substrate was detected. MgO films were deposited by e-beam evaporation on glass substrates with a dielectric layer at various deposition conditions. The substrate temperatures ranged from room temperature to 300 °C. The compressive stresses of the MgO films increased with increasing substrate temperature due to an increase in the intrinsic stress of MgO film. The discharge properties of the ac-PDP, specifically firing voltage (Vf), and sustaining voltage (Vs), were improved in a real panel with the strongly compressively stressed MgO film. Other properties of the MgO films were evaluated using atomic force microscopy, x-ray diffraction, x-ray photoelectron spectroscopy, and scanning electron microscopy. Strong compressive stress was caused by the dense microstructure of the film, mainly depending on the deposition temperature. The improved discharge properties of a MgO thin film were affected not by the crystallographic orientation or surface roughness of film but by the high compressive stress of film arising from its high density. In addition the more compressively stressed and denser MgO films showed better physical stability without a crack by thermal stress in the thermal budget of a manufacturing process for ac-PDPs.