Breath analysis has gained interest of many researchers lately. Acetone has been proven to be the biomarker for diabetes mellitus. The research depicts a thin film MEMS based gas sensor for acetone gas detection. MEMS techniques have been followed to develop the gas sensor involving the processes like oxidation, lithography, sputtering for deposition of thin films and electrodes, etc. Tin oxide thin film has been incorporated for detecting different concentration levels of acetone gas, viz, 20, 10, 7, 5, 3, 1.5 ppm. Various characterization like X-ray diffraction (XRD), scanning electron microscopy (SEM), atomic force microscopy (AFM), gas sensing characterization for recording resistance changes have been performed. XRD patterns reveal the formation of SnO2. AFM and SEM depict clear images of grain boundaries on the film. SnO2 thin films have been annealed at 300 °C to achieve an optimum grain size of 86.3 nm as depicted by AFM. Optimum operating temperature for sensing acetone gas has been computed to be 360 °C. Tin oxide can detect even a very low concentration of 1.5 ppm acetone gas with a good resistance response change of 30%. Apart from acetone gas, other interfering gases present in breath have also been tested. The sensor does not respond to them. The response time of the sensor for detection of acetone gas is approximately 3 min and the recovery time is approximately 4 min. A suitable instrumentation circuitry has also been designed for the sensor which displays the resistance value of the thin film before and after it comes in contact with acetone gas.