Composite films of BN/Pd were synthesized by depositing thin films of BN by pulsed laser deposition technique and evaporating a thin layer of palladium on top of it to form a bi-layer structure. This bi-layer structure was then subjected to rapid thermal annealing for the incorporation of Pd in BN. The films thus obtained were characterized by SEM, XRD and FTIR studies. Liquid petroleum gas (LPG) sensing properties were also investigated critically. Very stable and reproducible LPG sensing properties and comparatively at lower operating temperature of 460K would make this material superior to prevalent oxide based sensors. (C) 2012 Elsevier B.V. All rights reserved.