In this paper, we developed a simple two-step route to prepare a PdO/SnO₂ heterostructure with the diameter of the SnO₂ and PdO nanoparticles at about 15 nm and 3 nm, respectively. In the evaluation temperature window between 80 °C and 340 °C, PdO/SnO₂ shows the best response to 100 ppm of CO at 100 °C with fast response time (14 s) and recovery time (8 s). Furthermore, the PdO/SnO₂ nanoparticles exhibit a low detection limit and good selectivity to CO against interfering gases as well as rarely-seen low-temperature stability and reversibility. Such enhanced gas sensing performance could be attributed to both the ultrafine structure of PdO and the synergy between PdO and SnO₂. The results clearly indicate the application of PdO/SnO₂ as a pratical low-temperature sensing material for CO.