Abstract This work investigates the microstructure, optical absorption, electrical resistivity and LPG (Liquefied Petroleum Gas) response of ZnO thin film with the change in relative doping concentrations of In and Fe in the host lattice. All the films retain polycrystalline nature with hexagonal wurtzite unit cell structure. Scanning electron microscopic study reveals that regular spherical shaped nanoparticles are formed in undoped ZnO, but a compact surface morphology has obtained in case of 3 at.% In doped ZnO (IZO) thin films owing to the reduction in particle size. In the case of 1 at.% Fe co-doping in IZO, nano-flakes are formed. However, at higher Fe doping concentration, this typical particle morphology gradually changes to spherical shapes again. By comparing the energy dispersive X-ray analysis data, the formation of flakes type nanostructures is attributed to the presence of excess oxygen in the sample and it dominates the thermally activated conductivity phenomenon in the low temperature range. Fe-In co-doping results low optical transmittance and reduction in the band gap of ZnO. It also lowers the conductivity in IZO thin film. IZO thin film samples exhibit better LPG response than ZnO and Fe-In co-doped ZnO samples owing to its smaller particle size.