SnO2 nanoparticles were prepared via a sol-gel method by heating the mixture of hydrous SnO2 nanoparticles and SiO2 nanospheres at 600 °C. The average particle size of the obtained SnO2 nanoparticles is 3.3 nm, smaller than that of the SnO2 nanoparticles (~ 6.4 nm) prepared by calcining the pure hydrous SnO2 at 600 °C. The SiO2 nanospheres play an important role in restricting SnO2 nanocrystal growth. The ~3.3 nm-sized SnO2 nanoparticles exhibited high sensitivity for ethanol as well as quick response and recovery time. The concentration detection limit can be as low as 5 ppm at room temperature.