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Abstract Epitaxial (Ti_1−xMg_x)_0.25Al_0.75N(0001)/Al₂O₃(0001) layers are used as a model system to explore how Fermi‐level engineering facilitates structural stabilization of a host matrix despite the intentional introduction of local bonding instabilities that enhance the piezoelectric response. The destabilizing octahedral bonding preference of Ti dopants and the preferred 0.67 nitrogen‐to‐Mg ratio for Mg dopants deteriorate the wurtzite AlN matrix for both Ti‐rich (x< 0.2) and Mg‐rich (x≥ 0.9) alloys. Conversely,x= 0.5 leads to a stability peak with a minimum in the lattice constant ratioc/a, which is caused by a Fermi‐level shift into the bandgap and a trend toward nondirectional ionic bonding, leading to a maximum in the expected piezoelectric stress constante₃₃. The refractive index and the subgap absorption decrease withx, the optical bandgap increases, and the elastic constant along the hexagonal axisC₃₃= 270 ± 14 GPa remains composition independent, leading to an expected piezoelectric constantd₃₃= 6.4 pC N⁻¹atx= 0.5, which is 50% larger than for the pure AlN matrix. Thus, contrary to the typical anticorrelation between stability and electromechanical coupling, the (Ti_1−xMg_x)_0.25Al_0.75N system exhibits simultaneous maxima in the structural stability and the piezoelectric response atx= 0.5.