When designing a high energy density battery, one of the critical features is a high voltage, high capacity cathode material. In the development of Mg batteries, oxide cathodes that can reversibly intercalate Mg, while at the same time being compatible with an electrolyte that can deposit Mg reversibly are rare. Herein, we report the compatibility of Mg anodes with α-V2O5 by employing magnesium bis(trifluoromethane sulfonyl)imide in diglyme electrolytes at very low water levels. Electrolytes that contain a high water level do not reversibly deposit Mg, but interestingly these electrolytes appear to enable much higher capacities for an α-V2O5 cathode. Solid state NMR indicates that the major source of the higher capacity in high water content electrolytes originates from reversible proton insertion. In contrast, we found that lowering the water level of the magnesium bis(trifluoromethane sulfonyl)imide in diglyme electrolyte is critical to achieve reversible Mg deposition and direct evidence for reversible Mg intercalation is shown. Findings we report here elucidate the role of proton intercalation in water-containing electrolytes and clarify numerous conflicting reports of Mg insertion into α-V2O5.