The effect of Pd decoration on the gas sensing properties of vanadium oxide nanotubes (VONTs) was investigated. The Pd nanoparticles with diameter of 2–5nm were uniformly loaded on the surface of VONTs via a microwave irradiation. After loading Pd nanoparticles on the surface of VONTs, the gas sensing properties of the sensor displayed an enhancement in response to ethanol compared with pure VONTs. However, as the Pd nanoparticles became continuous, the response of the sensor to ethanol decreased. The morphological configurations of the Pd catalysts on VONTs greatly influenced the gas sensing properties of the sensor. The mechanism of promoting sensing properties with Pd nanoparticles is discussed.