Gas sensors are crucial in environmental monitoring, industrial safety, and medical diagnostics. Due to the rising demand for precise and reliable gas detection, there is a rising demand for cutting‐edge gas sensors that possess exceptional sensitivity, selectivity, and stability. Due to their tunable electrical properties, high‐density surface‐active sites, and significant surface‐to‐volume ratio, nanomaterials have been extensively investigated in this regard. The traditional gas sensors utilize homogeneous material for sensing where the adsorbed surface oxygen species play a vital role in their sensing activity. However, their performance for selective gas sensing is still unsatisfactory because the employed high temperature leads to the poor stability. The heterostructures nanomaterials can easily tune sensing performance and their different energy band structures, work functions, charge carrier concentration and polarity, and interfacial band alignments can be precisely designed for high‐performance selective gas sensing at low temperature. In this review article, we discuss in detail the fundamentals of semiconductor gas sensing along with their mechanisms. Further, we highlight the existed challenges in semiconductor gas sensing. In addition, we review the recent advancements in semiconductor gas sensor design for applications from different perspective. Finally, the conclusion and future perspectives for improvement of the gas sensing performance are discussed.