Polyaniline-magnesia (PANI/MgO) composites with a fibrous nanostructure were synthesized via in situ oxidative polymerization, enabling uniform MgO integration into the polyaniline matrix. These composites were characterized using FTIR spectroscopy to analyze intermolecular bonding, XRD to assess crystallographic structure and phase purity, and SEM to examine surface morphology and topological features. The resulting PANI/MgO nanofibers were utilized to develop ammonia (NH3) gas-sensing probes with evaluations conducted at room temperature. The study addresses the critical challenge of achieving high sensitivity and selectivity in ammonia detection at low concentrations, which is a problem that persists in many existing sensor technologies. The nanofibers demonstrated high selectivity and optimal sensitivity for ammonia detection, which was attributed to the synergistic effects between the polyaniline and MgO that enhance gas adsorption. Furthermore, the study revealed that the MgO content critically influences both the morphology and the sensing performance, with higher MgO concentrations improving sensor response. This work underscores the potential of PANI/MgO composites as efficient and selective ammonia sensors, highlighting the importance of MgO content in optimizing material properties for gas-sensing applications.