Abstract Nickel ferrite, an n-type semiconducting oxide material with cubic spinel (AB 2O 4) structure, has been synthesized by the hydrothermal process with an average crystallite size of ∼11 nm and surface area of 94 m 2 g −1 and characterized by X-ray diffraction (XRD), thermogravimetric analysis, scanning electron microscopy (SEM) and transmission electron microscopy (TEM) and Brunner–Emmett–Teller surface analyzer. The pH, temperature, pressure and time of reaction during hydrothermal synthesis has been shown to play a deterministic role in obtaining the semiconducting oxide in the required size regime with improved gas sensing behavior. Incorporation of palladium further improved the sensitivity, response time and selectivity to liquefied petroleum gas (LPG). Palladium incorporated NiFe 2O 4 (Pd: 1 wt.%) was able to detect up to 25 ppm LPG in air at an operating temperature of 200 °C. The improved gas sensing properties can mainly be attributed to the uniform nanocrystalline particles of the semiconducting oxide obtained by the hydrothermal crystallization, combined with the noble metal additive sensitization.