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Ultra-thin MgO nanosheets obtained by a sol-gel method were found to have cubic crystal structure with a space group of Fm-3m. The thickness of the sheets for the 600°C and 5 h annealing condition sample is 2 nm. Although the MgO sheets are two-dimensional and ultra-thin, unlike graphene, they are polycrystalline. Their bandgap energies are dependent on the thermal annealing conditions (which affect the thickness of the MgO nanosheets). It is found that there was bandgap narrowing of the MgO nanosheets with respect to the bulk values. UV-visible spectroscopy and X-Ray Photoelectron spectroscopy (XPS) enables us to identify the shifts of the valence and conduction bands causing the bandgap narrowing.