The CuAl1-xMgxO2 (x=0, 0.005, 0.01, 0.02, 0.03, 0.04) polycrystals with delafossite structure were prepared by solid state reaction. The effects of Mg doping on structure and properties of CuAlO2 polycrystals were studied. With the Mg doping amount x increasing from 0 to 0.02, the samples are of rhombohedral single phase with the space group of R3m, and density increases gradually. All samples exhibit the thermally activated electrical transport behavior of semiconductor, for x=0.02 sample, the room temperature resistivity is 1/19 of undoped sample, and the thermal activation energy decreases significantly (x=0, ρ300 K ~5.54 Ω·m， Ea~0.328 eV; x=0.02, ρ300 K~0.29 Ω·m, Ea~0.218 eV), the carrier concentration increased by 1 order of magnitude, as a result of the Al3+ is substituted by Mg2+, the new acceptor energy level is introduced. When x is greater than 0.02, the impurity phase of spinel MgAl2O4 increases, which leads to the drop of electrical conductivity and thermal conductivity. The lattice thermal conductivities of CuAl1-xMgxO2 polycrystals are absolutely dominant in total thermal conductivity, and decrease as the temperature (300~500 K) increases. The simulation results of the Callaway model demonstrate that the point defect-phonon scattering makes a major contribution to thermal resistance of all samples. Compared with x=0, the room temperature thermal conductivity is doubled (κ~13.065 0 W/(m·K)), while the sound velocity increases and the point defect-phonon scattering weakens when x=0.02. The analysis shows that the strong Mg-O bond is formed by Mg-doping, which improves the elastic modulus of crystal and the phonon frequency, while the scattering between point defects and phonon is weakenes, the point defects include intrinsic point defect, the mass fluctuation and strain field fluctuation caused by Mg doping. The increase of density by Mg doping is also beneficial for thermal conductivity.