This article explored the influence of lithium on cobalt-doped ZnO thin films fabricated via the sol-gel spin coating technique for NO2 gas sensing applications. The abundance of oxygen vacancies in ZnO can be proven by scanning electron microscopy, four-probe Hall measurements, photoluminescence spectroscopy, UV-visible spectroscopy, and X-ray photoelectron spectroscopy. The presence of lithium plays a crucial role in generating more oxygen vacancies in Co-doped ZnO was discussed. Among the fabricated samples, (Li-Co) co-doped ZnO exhibits better sensitivity (2940.17%), selectivity, repeatability, and stability (after 90 days) toward 75 ppm NO2 gas.