The gas-detecting ability of nanostructured ZnO has led to significant attention being paid to the development of a unique and effective approach to its synthesis. However, its poor sensitivity, cross-sensitivity to humidity, long response/recovery times and poor selectivity hinder its practical use in environmental and health monitoring. In this context, the addition of noble metals, as dopants or catalysts to modify the ZnO surface has been examined to enhance its sensing performance. Herein, we report preparation of Pd-loaded ZnO nanoparticles via a chemical precipitation approach. Various Pd loadings were employed to produce surface-modified ZnO nanostructure sensors, and their resulting NH
3
sensing capabilities both in dry and humid environments were investigated. Through a comparative gas sensing study between the pure and Pd-loaded ZnO sensors upon exposure to NH
3
at an optimal operating temperature of 350 °C, the Pd-loaded ZnO sensors were found to exhibit enhanced sensor responses and fast response/recovery times. The influence of Pd loading and its successful incorporation into ZnO nanostructure was examined by X-ray diffraction, high resolution-transmission electron microscopy, and X-ray photoelectron spectroscopy. XPS studies demonstrated that in all samples, Pd existed in two chemical states, namely Pd° and Pd
2+
. The possible sensing mechanism related to NH
3
gas is also discussed in detail.