Abstract Improving the sensing sensitivity and lowering the working temperature are the critical issues for the practical application of gas sensors. For a gas sensor, the sensing materials play important roles in determining the sensing properties. In the present work, γ-Fe2O3 microspheres composed of nanoparticles were successfully fabricated by a typical facile hydrothermal process and a following annealing treatment. Interestingly, the as-synthesized γ-Fe2O3 microspheres showed excellent sensing properties for the detection of ethanol gas with high sensitivity, and especially working temperature as low as room temperature. The gas sensing results showed that at the optimal operating temperature (200 °C), the response intensity of γ-Fe2O3 microspheres for 1000 ppm ethanol gas could reach 74.6 and the limit of detection (LOD) was about 0.026 ppm. At room temperature, the γ-Fe2O3 microspheres still demonstrated a good response to different concentrations of ethanol gas from 1 to 1000 ppm, with a very good selectivity over other gas species and a good stability. This study indicated that the γ-Fe2O3 phase could be a type of promising room-temperature gas sensing material for ethanol gas detection.