The majority of industrial regions across the globe are polluted due to the release of toxic chemical wastes into the environment. Hence, real-time and continuous environmental monitoring is indispensable to regulate the polluting sources and to evade serious health issues. In this context, polyaniline (PANI) and cadmium oxide (CdO) nanoparticles were synthesized, and subsequently, a PANI–CdO nanocomposite sensing element was fabricated using dip coating technique. Structural, morphological, optical, and room temperature sensing properties of the nanocomposite thin film were investigated using x-ray diffraction, field emission scanning electron microscopy, UV–Vis spectrophotometry, and an electrometer integrated with the custom-made gas testing chamber. PANI–CdO nanocomposite thin film sensor showed a selective response of 1580 towards 100 ppm of methanol with the response and recovery times of 19 s and 41 s, respectively.