Amorphous double-shell Fe₂O₃hollow nanospheres decorated with PdO nanoparticles were synthesized via a template-free hydrothermal method combined with subsequent annealing process. The chemical composition and microstructure evolution were examined using X-ray diffraction (XRD), X-ray photoelectron spectroscopy (XPS), scanning electron microscope (SEM), and transmission electron microscope (TEM). Interestingly, the internal structure of hollow spheres could be controlled by varying the reaction time. The formation of such structures was attributed to the combined effect of ripening and hydrogen ions etching process. The sensing properties of Fe₂O₃hollow nanospheres before and after functionalization with PdO nanoparticles were investigated. The PdO-loaded Fe₂O₃sensor exhibited obviously enhanced response to acetone compared with their unloaded counterparts. The improvement may arise from unique structure and catalytic effect of PdO in promoting the dissociation of gas molecules.