Melt textured single domains of Mg-doped YBa2Cu3O7 superconductors with homogeneous cation distribution and narrow superconducting transitions have been prepared by tap seeding growth. The strong reduction in the transition temperature, T-c, found in Mg substituted YBa2(Cu1-xMgx)(3)O-7 samples, suggests that Mg ions occupy the CuO2 planes. For low doping concentrations, the decrease in T-c is estimated as dT(c/)dx approximate to -12 K/at% Mg. Instead, for high doping values, a saturation of Mg substitution occurs within the matrix, leading to MgO segregation. The maximum amount of Mg atomic substitution has been estimated as x approximate to 4 at%, shifting T-c down to T-c approximate to 45 K. Studies of anisotropy of the superconducting state from magnetoresistance measurements reveal that, concomitant to the decrease in T-c, the mass anisotropy decreases with Mg doping. These results are interpreted in the framework of non-magnetic impurity scattering effects in d-wave superconductors, where the main distinguishing feature has been the development of new quasi-particle states within the superconducting gap.