Mg-doped AlN epilayers grown by metalorganic chemical vapor deposition have been studied by deep UV time-resolved photoluminescence (PL) spectroscopy. A PL emission line at 6.02 eV has been observed at 10 K in Mg-doped AlN, which is about 40 meV below the free-exciton (FX) transition in undoped AlN epilayer. Temperature dependent measurement of the PL intensity of this emission line also reveals a binding energy of 40 meV. This transition line is believed to be due to the recombination of an exciton bound to neutral Mg acceptor (I 1) with a binding energy, E bx of 40 meV. The recombination lifetime of the I 1 transition in Mg doped AlN have been measured to be 130 ps, which is close to the expected value. Excitation intensity dependence of time-resolved PL for Mg-doped AlN epilayer is also measured to understand carrier and exciton dynamics.