Composite NOx sensors were fabricated by combining partially and fully stabilized yttria-doped zirconia with alumina forming a composite electrolyte, Y2O3-ZrO2-Al2O3, and strontium-doped lanthanum manganese oxide mixed with gold to form the composite sensing electrode, La0.8 Sr0.2MnO3-Au. A surface chemistry analysis of the composite sensor was conducted to interpret defects and the structural phases present at the Y2O3-ZrO2-Al2O3 electrolyte, as well as the charge conduction mechanism at the LaSrMnO3-Au electrode surface. Based on the surface chemistry analysis, ionic and electronic transport properties, and microstructural features of sensor components, the working principle was described for NOx sensing at the composite sensor. The role of the composite materials on the NOx sensing response, cross-sensitivity to O2, H2O, CO, CO2, and CH4, and the response/recovery rates relative to sensor accuracy were characterized by operating the composite NOx sensors via the impedimetric method. The composite sensors were operated at temperatures ranging from 575 to 675 °C in dry and humidified gas environments with NO and NO2 concentrations varying from 0 to 100 ppm, where the balance gas was N2. It was found that the microstructure of the composite NOx sensor electrolyte and sensing electrode had a significant effect on interfacial reactions at the triple phase boundary, as well as the density of active sites for oxygen reactions. Overall, the composite NOx sensor microstructure enabled a high NOx sensing response, along with low cross-sensitivity to O2, CO, CO2, and CH4, and promoted NO detection down to 2 ppm.