Selective, sensitive and accurate gas monitoring system can help to control the air pollution, prevent an explosion and injury to industrial workers. Due to very high surface to volume ratio and unique properties, graphene is a highly suitable carbon material to detect toxic gases. As single layer, few layer or multi-layer, graphene either in pure form or after modifications has been studied for the application in gas sensors. Present paper serves as a compendium of research work carried out on graphene and its derivatives in gas sensing applications. Review is mainly concentrated on the sensing of three toxic gases namely nitrogen dioxide (NO2), carbon monoxide (CO) and ammonia (NH3). Special emphasis is done on describing the mechanisms for gas sensing by pristine graphene and after modifications.