High hole concentrations in AlxGa1−xN become increasingly difficult to obtain as the Al mole fraction increases. The problem is believed to be related to compensation, extended defects, and the band gap of the alloy. Whereas electrical measurements are commonly used to measure hole density, in this work we used electron paramagnetic resonance (EPR) spectroscopy to investigate a defect related to the neutral Mg acceptor. The amount and symmetry of neutral Mg in MOCVD-grown AlxGa1−xN with x = 0 to 0.28 was monitored for films with different dislocation densities and surface conditions. EPR measurements indicated that the amount of neutral Mg decreased by 60% in 900°C-annealed AlxGa1−xN films for x = 0.18 and 0.28 as compared with x = 0.00 and 0.08. A decrease in the angular dependence of the EPR signal accompanied the increased x, suggesting a change in the local environment of the Mg. Neither dislocation density nor annealing conditions contribute to the reduced amount of neutral Mg in samples with the higher Al concentration. Rather, compensation is the simplest explanation of the observations, because a donor could both reduce the number of neutral acceptors and cause the variation in the angular dependence.