A new hydrogen sensor utilizing a ferromagnetic hydrogen absorbing alloy was developed. An optimum sensing element, Cu particles coated with Pd-Co hydrogen absorbing alloy was prepared by the barrel sputtering technique. The surface of prepared Cu particle was covered uniformly by Pd-Co thin layer constituted of aggregated nanoparticles. The sensitivity of the sensing element to H-2 concentrations under flowing dry N-2 and dry air gases was examined. The element has a reasonable sensitivity to the H-2 concentration of the range from 3.8% to 0.2%, and the lower limit of detectable H-2 concentration was estimated to be less than 0.1%. In dry air, the water formation on the Pd-Co surface affected its sensing ability, because the temperature of the sensing element increased by the exothermic reaction. The effect of moisture on the H-2 sensing ability was also investigated. The moisture slightly degraded the output signal under flowing air. It could be ascribed to an additional consumption of hydrogen atoms by water molecules and oxygen atoms on the Pd-Co surface. This sensor takes advantage of magnetic susceptibility measurement, which requires no electrical wire between the sensing element and an electric circuit, leading to a safe evaluation system of H-2 concentration in air. (C) 2017 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.