Carrier recombination dynamics in Zn_1-xMg_xO alloys were studied by time-resolved photoluminescence as function of Mg concentration and lattice temperature for different emission and excitation energies. Disorder and carrier localization effects are found to play a significant role, becoming increasingly important for lower temperatures and higher Mg concentrations. Emission energy dependent dynamics were analyzed by the application of a theoretical model, yielding a characteristic localization energy of 60 ± 15 meV for the sample with the highest Mg concentration of x = 0.21.