The sensitive composite material was prepared by doping Pd and some metal oxides into ultrafine In2O3 matric material(8 nm) prepared by microemulsion method. A kind of selective C2H5OH gas sensor was developed based on a hot wire type gas sensor commercially available. The sensor possesses low power consumption , high selectivity and desirable long term stability. The dependence of the sensor output characteristics on temperature and humidity was also studied, and the working mechanism was discussed.