Abstract: Additives in semiconductor metal oxides are commonly used to improve sensing behavior of gas sensors. Due to complicated effects of additives on the materials microstructure, adsorption sites and reactivity to target gases the sensing mechanism with modified metal oxides is a matter of thorough research. Herein, we establish the promoting effect of nanocrystalline zinc oxide modification by 1-7 at.% of indium on the sensitivity to CO gas due to improved nanostructure dispersion and concentration of active sites. The sensing materials were synthesized via an aqueous coprecipitation route. Materials composition, particle size and BET area were evaluated using X-ray diffraction, nitrogen adsorption isotherms, high-resolution electron microscopy techniques and EDX-mapping. Surface species of chemisorbed oxygen, OH-groups, and acid sites were characterized by probe molecule techniques and infrared spectroscopy. It was found that particle size of zinc oxide decreased and the BET area increased with the amount of indium oxide. The additive was observed as amorphous indium oxide segregated on agglomerated ZnO nanocrystals. The measured concentration of surface species was higher on In2O3-modified zinc oxide. With the increase of indium oxide content, the sensor response of ZnO/In2O3 to CO was improved. Using in situ infrared spectroscopy, it was shown that oxidation of CO molecules was enhanced on the modified zinc oxide surface. The effect of modifier was attributed to promotion of surface OH-groups and enhancement of CO oxidation on the segregated indium ions, as suggested by DFT in previous work.