Doped metal oxide semiconductors have received greater attention for the development of gas sensor, working at low temperature, as well as of optoelectronics. In this work, a post transition metal ion of bismuth (Bi) doped cadmium oxide (CdO) thin films were deposited by a cost-effective pyrolytic spray process at substrate temperature of 300 °C. The effects of Bi-doping concentrations on the microstructural, gas sensing and optoelectronic properties of CdO thin films are systematically studied. The CdO film doped with 0.75 wt% of Bi exhibits high response (86.20%) to formaldehyde at a low operating temperature of 130 °C with satisfactory stability, selectivity and anti-interference to humidity. The response mechanism to formaldehyde is discussed in details. Optical results indicate that an improved transmittance above 80% in visible and NIR region was observed for all the Bi-doped CdO thin films with an enhanced optical band gap, in comparison with undoped CdO. Photoluminescence study indicates the presence of optical defects such as neutral donors and deep centers in CdO thin films. The high figure of merit value (4.56 × 10−3 Ω-1) obtained from 0.50 wt% of Bi-doped CdO is superior to the previously reported. The improved carrier mobility (78 cm2/V⋅s) is obtained from 0.25 wt% of Bi-doped CdO thin film. The present investigation indicated that the Bi-doped CdO thin films would be an attractive candidate for formaldehyde gas sensing and optoelectronic applications.