Nano-sized particles of Zinc oxide (ZnO) were synthesized using a new chemical rout. The chemical oxidative polymerization of aniline in the presence of nano ZnO was employed to synthesize a polyaniline-zinc oxide (PANI-ZnO) nanocomposite. The material was characterized by using transmission electron microscopy, XRD, scanning electron microscopy (SEM), fourier transform infrared spectroscopy (FTIR), and Thermogravimetric analysis (TGA). The conductivity measurements showed the resulting composites possessed higher conductivity as compared to pure polyaniline (PANI). The nanocomposite exhibited fairly sensitive towards solution of aqueous ammonia (NH3), when it was exposed to various concentrations of NH3 in an ambient room temperature. The results show that the sensor has good sensitivity and good repeatability upon repeated exposure to NH3. PANI-ZnO nanocomposite was also used to study electrical conductivity under isothermal conditions in the temperature range 50-130 degrees C. The composite was found stable under ambient conditions below 90 degrees C in terms of DC electrical conductivity retention. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 117: 1601-1607, 2010