The undoped, Mg2+ doped, Ce3+ doped as well as Mg2+:Ce3+ codoped Gd3Al2Ga3O12 crystals were grown from the melt by the micro-pulling down method. Ce3+ and Mg2+ ions were codoped in a wide concentration range. A study of Mg2+ ion concentration effect on the luminescence and scintillation properties as well as segregation of atoms and defects creation processes were carried out. Mg2+ doping in Gd3Al2Ga3O12 led to the creation of OO• defects localized next to Mg2+ sites due to charge imbalance compensation. Consequently, neutral (MgGa/Al/GdOO)x defects were formed. In Ce3+ doped crystals, Mg2+ codoping changed the valence state from Ce3+ to Ce4+ to maintain charge neutrality. Hence, additional neutral (CeGd•-MgGa/Al/Gd′)x and (CeGd-MgGa/Al/GdOO)x defects appeared. Moreover, Mg2+ induced charge imbalance in GAGG crystal might also be compensated by the formation of oxygen vacancies (VO••). The Mg2+ ions imposed defects deteriorated the segregation of atoms. Accordingly the radial inhomogeneity of the crystals was diminished. The presence of stable Ce4+ and defects imposed by Mg2+ ions codoping were proved by absorption, photoluminescence, and scintillation decay time analysis. Hence, Mg2+ codoping resulted in quenching of the Ce3+ luminescence, acceleration of scintillation response, reduction of light yield, and thermally stimulated luminescence. The mechanism explaining a strong luminescence quenching with increasing Mg2+ ions concentration was proposed.