Using uniform carbon nanospheres as sacrificial templates, gold nanoparticle-modified ZnO@ In2O3 hollow nanospheres with controlled dimensions and porous architectures were successfully synthesized through water bath, hydrothermal and chemical reduction methods. Gas sensing evaluation revealed that the Au-decorated ZnO@ In2O3 hollow nanostructures exhibited a dramatically amplified response up to 14.8 when exposed to 10 ppm formaldehyde analyte at room temperature. Furthermore, multifaceted performance benefits of Au-decorated ZnO@ In2O3 over single-phase ZnO, Au-ZnO, ZnO@ In2O3 heterojunction-based composites were observed, including excellent selectivity towards formaldehyde even in complex gas mixtures; tremendous sensitivity enhancement stemming from synergies between efficient gas diffusion through hollow heterojunction nanospheres and accelerated surface reactions at catalytically-active Au sites; and rapid, fully-reversible response/recovery time of 32 s and 42 s, respectively. In-depth investigations were conducted into the fundamental sensing mechanisms enabling formaldehyde detection using AC impedance spectroscopy, in situ diffuse reflectance Fourier transform infrared spectroscopy (DRIFTS), and density functional theory (DFT) computational modeling analyses.