Sensors based on Ag/α-Fe2O3 nanoparticles have been prepared by the coprecipitation method for sensing methyl mercaptan at room temperature. X-ray diffraction patterns of samples matched perfectly with characteristic peaks of hematite with no peaks assigned to Ag even at the highest concentration. STEM images and EDX analysis revealed the presence of Ag nanoparticles (from 2 to 5 nm) which were highly dispersed onto α-Fe2O3 surface with an Ag/Fe ratio from 0.014 to 0.099. The Ag nanoparticles were deposited on the hematite surface. Sensing tests of Ag-loaded hematite nanoparticles showed much higher response signal than the unmodified sensor. Hematite loaded with 3%(Wt) Ag showed the highest response with a linear dependence from 20 to 80 ppm. The sensor also depicted a good selectivity and stability during 4 days with short recovery time. The high dispersion of reduced Ag evaluated by XPS analysis played an important chemical role in the sensing mechanism that favored the contact of CH3SH with oxygen.