Thin film samples of Mg80Ti20 (Mg–Ti) and Mg, both with and without H, were investigated in a series of X-ray photoelectron spectroscopy (XPS) measurements. The samples were covered with a thin protective layer of Pd, which was removed by Ar+ sputtering prior to data acquisition. This sputtering was found to reduce both oxides and hydrides. A distinct, previously unknown peak was revealed in the Mg KLL spectrum of the Mg–Ti–H samples, located between the metallic and the MgO component. This peak was attributed to trapping of H in very stable interstitial sites at the interface between Ti nano-clusters and the Mg matrix, based on earlier density functional theory calculations and supported by so-called Bader analysis. The latter was performed in order to study the theoretical charge distribution between Mg, Ti and H, establishing a link between the position of the previously unknown peak and the effect of H on the valence state of Mg. The composition of the samples was studied both by energy dispersive spectroscopy using transmission electron microscopy and by quantitative XPS analysis. Final state Auger parameters (AP) were obtained for metallic Mg, MgO and MgH2, as well as Mg affected by trapped H. No difference between the AP values from the metallic components was found between the Mg and the Mg–Ti samples. The AP values for MgO and MgH2 were consistent with previous reports in literature; several eV lower than the metallic value. Mg in the vicinity of trapped hydrogen, on the other hand, showed a more metallic character, with its corresponding AP value less than 1 eV below the AP for pure Mg.