Uniformly distributed In₂O₃ nanoparticle modified reduced graphene oxide sheets (In₂O₃/rGO) were synthesized via a normal-pressure microwave-assisted method with an in situ growth process. In the In₂O₃/rGO composites, In₂O₃ nanoparticles with sizes ranging from 3 to 26 nm are evenly fixed on rGO surfaces. In₂O₃/rGO sensors exhibit high sensitivity, rapid response and recovery, and high selectivity toward 1–50 ppm NO gas at 150 °C. The mass ratio of indium nitrate to GO during synthesis (16–24) dramatically influences the NO-sensing properties of In₂O₃/rGO composites, and the 20-In₂O₃/rGO sensor shows the highest response at the optimal operating temperature of 150 °C. Compared with the In₂O₃ sensor, the 20-In₂O₃/rGO sensor presents greatly improved gas-sensing properties, including higher response, lower optimal operating temperature, and better selectivity toward NO gas. The response of the 20-In₂O₃/rGO sensor toward 50 ppm NO at 150 °C is 30.6, 6 times higher than that (5.2) of the In₂O₃ sensor. The enhanced NO-sensing properties of the In₂O₃/rGO nanocomposite could be attributed to the synergistic effect of In₂O₃ particles and rGO sheets.