Abstract Metal oxide semiconductor (MOS) gas sensors still face the critical challenge of high operating temperatures. While material engineering strategies have enabled room‐temperature operation, the dynamic evolution of active phases during sensing—a key factor governing structure‐activity relationships—remains poorly understood due to the lack of real‐time characterization techniques. Here, we design phase‐engineered In 2 O 3 homojunctions (cubic/rhombohedral) via graphene‐assisted hydrothermal synthesis and demonstrate their exceptional NO 2 sensing performance at room temperature. The optimized In 2 O 3 /graphene (In 2 O 3 /G) hybrid exhibits a 20‐fold enhancement in response (1208 versus 58 for pure In 2 O 3 at 5 ppm NO 2 ), achieving ultrahigh sensitivity with minimal power consumption. By employing in situ Raman spectroscopy to probe structural dynamics during gas exposure, we identify a reversible phase transition between cubic and rhombohedral In 2 O 3 , with the rhombohedral phase acting as the dominant active site for NO 2 adsorption/desorption. This real‐time observation of phase‐dependent reactivity establishes a direct correlation between transient structural changes and sensor response, resolving a long‐standing ambiguity in MOS‐based sensing mechanisms. Our findings not only pinpoint the active phase but also provide a generalizable methodology to bridge nanoscale material dynamics with macroscopic device functionality, paving the way for rational design of high‐performance sensors.