In2O3-nanoparticle-modified single crystalline ZnO nanorods with enhanced gas-sensing performance were prepared using a facile sol-gel and chemical precipitation process. In2O3 nanoparticles obtained good dispersibility and were modified on the surface ZnO nanorods. One-dimensional ZnO nanorods served as a matrix for In2O3 nanoparticles, which effectively restrained the agglomeration of the In2O3 nanoparticles and increased the active sites for the sensing reaction. The sensing performance of as-prepared In2O3/ZnO and ZnO sensors was systematically tested using n-butanol as the probe analyte. Test results revealed the In2O3/ZnO sensor response was 104.3 at a concentration of 100 ppm, 3.5 and 5.3 times higher than that of the pure ZnO and In2O3 sensor, respectively. The influence of added In2O3 on sensing performance of the In2O3/ZnO nanocomposites was discussed. Test results showed that the optimal atomic ratio of indium was 3.3%. The response of the In2O3/ZnO sensor reached 6.1 at a concentration of 1 ppm, suggesting good detection of n-butanol. The In2O3/ZnO sensor displayed rapid response-recovery speed along with good selectivity and stability. A possible sensing mechanism for In2O3/ZnO was thus proposed based on experimental data and band structure analysis.