4 wt% La-doped SnO2 nanocrystalline powders impregnated with 0.5–1.5 wt% Pd were synthesized by a facile sol–gel method. The powders characterized through XRD, TEM, EDX as well as XPS analyses were used for the fabrication of sensors. 0.5 wt% Sb2O3 was incorporated in each case to reduce the resistance of sensors. The gas response studies revealed a large enhancement in low concentration (1–100 ppm) ethanol vapour sensing at comparatively lower operating temperature (300 °C) on 1.0 wt% Pd incorporation. The response observed (~86 %) for 10 ppm vapour was ~16 % greater compared to 4 wt% La-doped SnO2 with improved response (2 s) and recovery (15 s) times. The high ethanol vapor response at comparatively lower operating temperature of this sensor is attributed to the combinatorial effect of alkalescence of SnO2 due to La-doping and widening of depleted region by spill-over process of PdO present on SnO2 surface.