Nanostructured tin oxide (SnO2) thin films are deposited using reactive r.f. sputtering by varying deposition time and substrate temperature during deposition. A wide range of tin oxide film thicknesses between 100 nm to 550 nm are deposited by varying the deposition time while substrate temperature during deposition is also varied from room temperature to 400 °C. The homogeneity of the deposited film during deposition is ensured using secondary electron microscopy system (SIMS). The crystal structure and microstructure of the deposited films are investigated using x-ray diffraction (XRD) and scanning electron microscopy (SEM) respectively while the sheet resistance of deposited film is determined by four point probe method. The x-ray diffraction study showed that deposited films are orientated along (110) plane at elevated temperature, manifested with increase of grain size with thickness and substrate temperature except at 300 °C where it decreases. Microstructural studies using cross sectional SEM reveals that 470 nm tin oxide film deposited at room temperature shows highest porosity. The porosity of the films is quantified by using spectroscopic ellipsometry results and it varies from 23.2% to 8.99% for the film deposited at room temperature and 400 °C respectively. LPG response for all deposited films is also measured. The LPG sensitivity for the sensor film of various thicknesses shows linear response with porosity. SnO2 thin films deposited from room temperature to 300 °C shows no significant variation in sensitivity for LPG. The sensor response for LPG decreases sharply for the film deposited above 300 °C. Minimum resistivity 0.3536 Ω.cm is obtained for the tin oxide film deposited at 400 °C. The mechanism of LPG sensing property of nanostructured tin oxide thin film is also explained.