In this study, by applying a hydrothermal method with a subsequent in situ reduction treatment, Ag/[email protected]2O3-based sensitive materials were designed and synthesised to investigate toluene sensing performance (e.g. optimum operating temperature, selectivity, response/recovery time and long-term stability). The samples presented the gas-accessible structure with hollow micro-flowers assembled by abundant porous nanosheets. The as-synthesised Ag0.4Pd0.6@In2O3 sensors possessed an ultra-high response (15.9–1 ppm) towards toluene gas at a low operating temperature (180 °C), with a short response/recovery time (7/13 s) and low detection limit (20 ppb). Additionally, excellent reproducibility and selectivity was acquired after a series of tests. Moreover, the underlying sensing mechanism of the Ag0.4Pd0.6@In2O3 sensor to toluene gas was also thoroughly explained. Overall, the findings of this study open a pathway for detecting toluene gas with low cost and more competitiveness and significantly benefit to public safety monitoring and health care.