The layered transition metal oxide compounds which are composed of hexagonal close packed oxygen atoms network with lithium and transition metal ions in an alternating (111) planes, such as LiCoO2, LiNiO2, LiCoxNi1- xO2 etc. have been studied extensively as alternate cathode materials for low power applications. LiCoO2 thin films have been widely considered as good candidates for their use as environmental gas sensors for detecting pollutant gases like carbon monoxide, carbon dioxide, hydrocarbons, ammonia and nitrogen oxides. The device performance is related to the structural properties and morphological features of the film, which in turn dependant on the deposition technique as well as the preparative parameters. Hence in the present investigation LiCoO2 thin films were prepared by pulsed laser deposition and the gas sensing properties of LiCoO2 thin filmswere studied. When the reducing gas is exposed to the sensing element, it reduces the resistance of the material, which confirms the typical characteristic of a ntypematerial.