Fe doped ZnO (FZO) nanostructures with varying Fe concentrations say 0, 1, 3, 5, 7, and 9 wt.% were prepared on the glass substrates via the sol-gel dip-coating technique. Effects of Fe-doping concentration on the structural, morphological, optical properties and the response to iso-butane (i-C4H10) gas of ZnO nanostructures were studied. The X-ray diffraction (XRD) analysis showed that Fe doping has a significant effect on particle size, strain, and crystalline quality in the prepared films. Scanning Electron Microscopy (SEM) images of the prepared samples revealed nanoparticles and nanorods formation, with content Fe variation. The Energy Dispersive Spectroscopy (EDS) results confirmed the presence of Zn, O, and Fe elements. UV-Vis absorption measurements showed that the deposited films have a transmittance between 69% and 89%, and the differential optical transmittance plot indicated that the band gap energy decreases with increasing Fe doping ratio. The sensitivity characteristics to iso-butane gas were evaluated as a function of the film composition, operating temperature in the range from 150 to 300 °C, and volume gas concentration from 0.8 to 6.4 Vol.%. The obtained results showed that the iso-butane response, as well as the structural, morphological, and optical properties of ZnO nanostructures, changed with the Fe doping. Also, the iso-butane sensing results evidently showed that the 3 wt.% Fe doped ZnO nanostructure offered a remarkable response of ~ 76.3% with a quick response time of ~ 67 s to 0.8 Vol.% of i-C4H10 at the optimum operating temperature of 250 °C. Therefore, FZO nanostructures produced can be used as a sensor for the detection of iso-butane gas in various industrial and domestic branches.