This study demonstrates a novel approach toward development of advanced chemical sensors based on chemically functionalized single-walled carbon nanotubes (SWNTs). SWNTs with covalently attached poly(m-aminobenzene sulfonic acid), SWNT-PABS, have shown improved sensor performance for detection of NH3. Compared to purified SWNTs, devices fabricated with SWNT-PABS have shown more than 2 times higher change of resistance upon exposure to NH3. Importantly, the SWNT-PABS sensors rapidly recover their resistance when NH3 is replaced with nitrogen. Exposure to NH3 induces significant changes in the electronic structure of SWNT-PABS, which allow detection of NH3 at concentrations as low as 5 ppm. Thin film deposited between interdigitated electrodes was explored as a device configuration for development of gas sensors.