Two-phonon contributions to meV-resolved inelastic x-ray scattering spectra of MgB2 at 300K are identified, in good agreement, in both intensity and energy, with a harmonic calculation using the force constant matrix from ab-inito LDA calculations. This contribution impacts the determination of the linewidth of the E2g phonon mode that is so important for the high Tc of this material. To the best of our knowledge, this is the first observation of peaks in measurements of phonon dispersion (q>0) due to 2-phonon scattering in a non-rare-gas solid.