The success of carbon nanotubes has triggered a great deal of research interest in other one-dimensional nanomaterials with the aim of designing innovative nanostructures with attractive and distinctive attributes for applications in sensing gas molecules and toxic substances. In the present study, first-principles density functional theory calculations were exploited to assess the capability of the small tin oxide cluster (SnxOy)-decorated (6,0)aluminum nitride (AlN) nanotube for detecting methane(CH4) in terms of energetic, structural, and electronic properties. We found that SnxOy clusters were chemisorbed on the surface of the AlN nanotube due to the considerable adsorption energy and the notable charge transfer from the former to the latter. Further calculations demonstrate that the energy band gap and work function of the AlN nanotube were reduced in the presence of additives. Benefiting from the higher affinity of SnxOy toward the CH4 molecule, the Sn3O3-decorated AlN nanotube exhibited the greatest CH4 adsorption energy. The electrical conductivity increased as the energy band gap and effective mass decreased dramatically. Additionally, the type of Sn3O3-decorated AlN nanotube changed from a p-type semiconductor to an n-type one after adsorbing the CH4 molecule. Therefore, the Sn3O3-decorated AlN nanotube endows great promise as a thermopower-based, resistance-based, and Seebeck-effect-based CH4 sensing material.