Herein, α-Fe₂O₃ nanocubes were synthesized, characterized and employed as functional and promising material for the development of ethanol gas sensor. Facile hydrothermal process was used to synthesized the nanocubes and characterized by several techniques which confirmed the large-quantity synthesis, wellcrystallinity with rhombohedral structure of α-Fe₂O₃. The Raman-scattering spectrum of the synthesized nanocubes exhibited several Raman-active modes which further confirmed the formation of pure α-Fe₂O₃. As a functional material, the synthesized α-Fe₂O₃ nanocubes were used as electrode material to fabricate ethanol gas sensor which was tested at various working temperatures, i.e., 300 °C, 400 °C and 450 °C which revealed that the 400 °C was the optimal working temperature. Thus, at 400 °C working temperature, in presence of 100 ppm ethanol gas, the fabricated sensor exhibited highest gas response of 1.69 with response time < 1 s and recovery time of 1485 s.