AbstractHerein, we present ultrasmall delafossite‐type Mg‐doped CuCrO2 nanocrystals prepared by using hydrothermal synthesis and their first application as photocathodes in efficient p‐type dye‐sensitized solar cells. The short‐circuit current density (Jsc) is notably increased by approximately 27 % owing to the decreased crystallite size and the enhanced optical transmittance associated with Mg doping of the CuCrO2 nanocrystalline sample. An open‐circuit voltage (Voc) of 201 mV, Jsc of 1.51 mA cm−2, fill factor of 0.449, and overall photoconversion efficiency of 0.132 % have been achieved with the CuCr0.9Mg0.1O2 dye photocathode sensitized with the P1 dye under optimized conditions. This efficiency is nearly three times higher than that of the NiO‐based reference device, which is attributed to the largely improved Voc and Jsc. The augmentation of Voc and Jsc can be attributed to the lower valance band position and the faster hole diffusion coefficient of CuCr0.9Mg0.1O2 compared to those of the NiO reference, respectively, which leads to a higher hole collection efficiency.