Polyaniline/Sm2O3 (PANI/Sm2O3) nanocomposite with 5 wt% Sm2O3 was synthesized by in-situ oxidative polymerization of emeraldine base (EB) phase in presence of Sm2O3 microspheres. The synthesized sample was characterized by XRD, FE-SEM, Raman and FT-IR. Characterization data have shown that PANI/Sm2O3 composite was formed by Sm2O3 particles surrounded by a thick coating of polyaniline. The gas-sensing performances of conductometric sensors based on PANI/Sm2O3 were investigated for the first time to detect hydrogen in air at room temperature (30 °C). The experimental results reported here demonstrated the good sensing properties of the composite-based PANI/Sm2O3 sensor in terms of response, fast response/recovery time as well as excellent response repeatability, compared to the pure PANI and Sm2O3. The improved sensing performances were attributed to the formation of p-p heterojunction in PANI/ Sm2O3 composite.