In this work, Zn₂SnO₄microstructures functionalized with PdO nanoparticles were successfully synthesized combination a facile one-step hydrothermal method and subsequent wet impregnation treatment. X-ray diffraction (XRD), field-emission scanning electron microscopy (FESEM), transmission electron microscopy (TEM), and selected-area electron diffraction (SAED) were employed to obtain the crystalline and morphological characterization of the as-prepared products. The results demonstrated that the morphology of the final Zn2SnO4 samples have uniform octahedral structure. Interestingly, the surface of Zn₂SnO₄octahedrons was assembled by nanosheets with the assistant of CTAB. In addition, gas sensing properties of the as-prepared Zn₂SnO₄octahedrons before and after functionalization with PdO nanoparticles were systematically investigated. Compared with pure Zn₂SnO₄, the sensor based on 2 wt% PdO-loaded Zn₂SnO₄octahedrons exhibited obviously enhanced gas sensing properties toward ethanol. The response value was 82.3 toward 100 ppm ethanol, which was almost five times higher than that of pure Zn₂SnO₄. The novel structure of Zn₂SnO₄octahedrons and the catalytic effect of PdO nanoparticles were believed to be the main reason of the enhancement of gas sensing characteristics.