Miniaturized gas sensors or electronic noses to rapidly detect and differentiate trace amount of chemical agents are extremely attractive. In this paper, we report on the fabrication and characterization of a functional tin oxide nanoparticle gas sensor. Tin oxide nanoparticles are first synthesized using a convenient and low-cost mini-arc plasma source. The nanoparticle size distribution is measured online using a scanning electrical mobility spectrometer (SEMS). The product nanoparticles are analyzed ex-situ by high resolution transmission electron microscopy (HRTEM) for morphology and defects, energy dispersive X-ray (EDX) spectroscopy for elemental composition, electron diffraction for crystal structure, and X-ray photoelectron spectroscopy (XPS) for surface composition. Nonagglomerated rutile tin oxide ( ) nanoparticles as small as a few nm have been produced. Larger particles bear a core-shell structure with a metallic core and an oxide shell. The nanoparticles are then assembled onto an e-beam lithographically patterned interdigitated electrode using electrostatic force to fabricate the gas sensor. The nanoparticle sensor exhibits a fast response and a good sensitivity when exposed to 100 ppm ethanol vapor in air.