Nanostructured tungsten oxide thin film based gas sensors have been developed by thermal evaporation method to detect CO at low operating temperatures. The influence of Fe-doping and annealing heat treatment on microstructural and gas sensing properties of these films have been investigated. Fe was incorporated in WO3 film by co-evaporation and annealing was performed at 400°C for 2h in air. AFM analysis revealed a grain size of about 10–15nm in all the films. GIXRD analysis showed that as-deposited films are amorphous and annealing at 400°C improved the crystallinity. Raman and XRD analysis indicated that Fe is incorporated in the WO3 matrix as a substitutional impurity, resulting in shorter OWO bonds and lattice cell parameters. Doping with Fe contributed significantly toward CO sensing performance of WO3 thin films. A good response to various concentrations (10–1000ppm) of CO has been achieved with 400°C annealed Fe-doped WO3 film at a low operating temperature of 150°C.