Polyaniline (PANI)/Neodymium oxide (Nd 2 O 3 ) composite has been synthesized by using insitu polymerization method for different concentrations of Nd 2 O 3 powder. DC conductivity studies of PANI-Nd 2 O 3 composites for different weight percentage (wt%) show thermally activated behaviour. The conductivity was found to increase with the increase in temperature indicating the semiconducting behaviour of all the compositions. Maximum conductivity was observed in 30 wt% of Nd 2 O 3 in polyaniline. The ac conductivity has been studied in the frequency range of 50 Hz to 1 MHz and it is found that 40 wt% shows high conductivity compared to pure polyaniline and other complexes. On exposure of the composites to liquefied petroleum gas (LPG), increase in resistance was observed with the increase in gas concentration. Maximum sensitivity for gas sensing was observed in the composite of 50 wt% Nd 2 O 3 in polyaniline.