Ultrasmall SnO₂ nanoparticles with an average size of 7 nm were synthesized by a hydrothermal method and composited with reduced graphene oxide (rGO) through an ultrasonic assisted solution process. The structural, functional, morphological and compositional properties of synthesised SnO₂ and rGO/SnO₂ were studied by XRD, FTIR, HRSEM, HRTEM, XPS and Raman analyses. The prepared materials were developed as a film over a PVA/KOH conductive layer coated substrate with varying thickness of 3, 5 and 7 μm to study their ozone sensing characteristics at room temperature. The physico-chemical properties reveal that the fabricated SnO₂ and rGO/SnO₂ nanocomposite films have a strong interaction with the ozone gas. Among the fabricated composite films rGO/SnO₂-S1 film exhibits high ozone sensing response (38%) at room temperature. Additionally, the electrochemical performance of SnO₂ and rGO/SnO₂ nanocomposites was analysed and the rGO/SnO₂ nanocomposite exhibited higher specific capacitance (545 F g⁻¹) than that of pure SnO₂ (236 F g⁻¹) at a current density of 1 A g⁻¹ with higher cyclic stability (96%) than that of pure SnO₂ (86%) at the current density of 20 A g⁻¹ for a continuous 5000 charge–discharge cycles. Thus, the rGO/SnO₂ nanocomposite showed an excellent ozone sensing and energy storage performance.