Nanocrystalline TiO2-AgO thin films and powders were prepared by an aqueous particulate sol-gel route at the low temperature of 573 K (300 °C). Titanium tetraisopropoxide and silver nitrate were used as precursors, hydroxypropyl cellulose was used as a polymeric fugitive agent in order to increase the specific surface area. X-ray diffraction (XRD) and Fourier transform infrared spectroscopy (FTIR) revealed that the phase composition of the mixed oxide depends upon the annealing temperature, being a mixture of TiO2 and AgO in the range 573 K to 773 K (300 °C to 500 °C) and a mixture of TiO2, AgO, Ag2O at 973 K (700 °C). Furthermore, one of the smallest crystallite sizes was obtained for TiO 2-AgO mixed oxide, being 4 nm at 773 K (500 °C). Field emission-scanning electron microscopic (FE-SEM) and atomic force microscopic (AFM) images revealed that the deposited thin films had nanostructured and nanoporous morphology with columnar topography. Thin films produced under optimized conditions showed excellent microstructural properties for gas sensing applications. They exhibited a remarkable response toward low concentrations of CO gas (i.e., 25 ppm) at low operating temperature of 473 K (200 °C), resulting in an increase of the thermal stability of sensing films as well as a decrease in their power consumption. Furthermore, TiO2-AgO sensors follow the power law for the detection of CO gas.