SnO₂ nanowires (NWs) are used in gas sensors, but their response to highly toxic gas H₂S is low. Thus, their performance toward the effective detection of low-level H₂S in air should be improved for environmental-pollution control and monitoring. Herein, Ag₂O nanoparticle decorated SnO₂ NWs were prepared by a simple on-chip growth and subsequent dip-coating method. The amount of decorated Ag₂O nanoparticles on the surface of SnO₂ NWs was modified by changing the concentration of AgNO₃ solution and/or dipping times. Gas-sensing measurements were conducted at various working temperatures (200–400 °C) toward different H₂S concentrations ranging within 0.1–1 ppm. The selectivity of Ag₂O-decorated SnO₂ NW sensors for ammonia and hydrogen gases was tested. Results confirmed that the Ag₂O-decorated SnO₂ NW sensors had excellent response, selectivity, and reproducibility. The gas-sensing mechanism was interpreted under the light of energy-band bending by sulfurization, which converted the p–n junction into n–n, thereby significantly enhancing the sensing performance.