In this study, Mg‐doped CuCr1−xMgxO2 (x = 0, 0.01, 0.03, 0.05) fibers are synthesized via electrospinning process followed by a two‐step heat treatment in air and Ar atmospheres. The produced samples are all crystalline with a fiber diameter ranging from 120 to 140 nm. The effect of Mg2+ substitution for Cr3+ on the structural, morphological, and optical properties of CuCrO2 fibers is investigated systematically. Structural characterizations indicate that the solubility limit of Mg2+ is around 3 at.% and beyond this concentration the formation of MgO phase is observed. This also leads to the formation of Cu cations with (+2) oxidation state. In addition, the incorporation of Mg into the CuCrO2 lattice hinders the formation of perfect hexagonal‐shaped isolated grains and contribute to the preservation of fiber morphology after the final sintering step. Further, the optical transmittance in the visible range decreases with increasing Mg‐doping ratio. The corresponding optical band gaps are determined to be 3.53, 3.47, 3.30, and 3.22 eV, respectively, for x = 0, 0.01, 0.03, 0.05.