Yttrium (Y) doped (doping concentration - 0, 1, 3 and 5 wt%) ZnO thin films were deposited using spray pyrolysis technique. The structural, surface morphological, optical and compositional properties were analysed using X-Ray diffraction (XRD), Atomic Force Microscopy (AFM), UV-vis NIR spectrophotmetry (UV), photoluminescence study (PL) and elemental composition analysis. Ammonia vapour sensing properties such as response/recovery, stability and repeatability were studied at room temperature. XRD results confirmed that the prepared samples have hexagonal wurtzite structure. ZnO:Y thin film with 5 wt% yttrium doping exhibits excellent sensing response of 99, fast response/recovery times of 29 s/ 7 s which may be due to the existence of oxygen vacancies in the case of ZnO:Y (5 wt%) film sample confirmed by photoluminescence (PL) study. These oxygen vacancies attract more electrons and thus enhance the gas sensing. In addition, increase in the number of active sites caused by the substitution of Y3+(trivalent) ions into the Zn2+ (divalent) regular sites as confirmed by the observed M-B (Moss-Burstein) effect also causes an enhancement in the gas sensing. Surface roughness, another reason for the enhanced sensitivity, has been confirmed by AFM.