Quantum-sized ZnO nanoparticles have been prepared by the sol-gel method in aqueous medium using sodium dodecyl sulfate (SDS) as surface modifier to control the growth of ZnO particles and Ostwald ripening, because the majority of bioanalyses require water-stable materials. The crystal structure, grain size and optical property of the ZnO nanoparticles have been characterized using X-ray diffraction (XRD), high resolution transmission electron microscopy (HRTEM) and X-ray photoelectron spectroscopic (XPS). The obtained quantum-sized ZnO nanoparticles as a novel sensing material have been used to detect NO 2 in environment. The sensing tests indicate that the ZnO sensing material not only has high response to NO 2 but also exhibits high selectivity to CO and CH 4 at optimum operating temperature of 290 °C. The sensing response depends on the calcination temperature of the ZnO precursor and operating temperature of the sensor. The intrinsic sensing property has also been exploited by photoluminescence (PL) and Raman spectra.