The proper coupling of different semiconductor nanostructures is a promising strategy to enhance the electrocatalytic activity for better performance of chemical sensor-based electrodes. Herein, we demonstrate the successful combination of mesoporous iron oxide (α-Fe2O3) doped cadmium selenide (CdSe) semiconducting nanocomposite for the sensitive detection of liquid methanol by the electrochemical technique. The active nanocomposite was synthesized by a facile modified sol-gel method in the presence of Pluronic F127 as a structure-directing agent, followed by a simple sono-chemical procedure. The structural, elemental, and morphological features of the as-synthesized α-Fe2O3/CdSe nanocomposite were fully characterized using X-ray diffraction (XRD), high-resolution transmission electron microscopy (HR-TEM), X-ray photoelectron spectroscopy (XPS), Fourier transforms infrared (FTIR), and Raman spectroscopy, which confirmed the purity, crystallinity and nanoscale dimension of synthesized materials. Compared to bare glassy carbon electrode (GCE) or CdSe modified GCE, the newly developed nanocomposite modified GCE with structure (α-Fe2O3−CdSe/Nafion/GCE) was found to be superior in methanol sensing. Outstanding sensor sensitivity of 0.2744 μAmM−1 cm−2, low limit of detection (LOD) at (S/N = 3) = 0.041 ± 0.005 mM and a wide dynamic range from 0.2 up to 800 mM have been obtained. The current electrode system exhibited also good operational stability, reproducibility, and repeatability during methanol sensing. The current research findings indicate the possible potential application of current nanocomposite as an efficient electrochemical sensor for other target analytes.