A highly active tannin doped polyaniline-TiO₂ composite ammonia gas sensor was developed and the mechanism behind the gas sensing activity was reported for the first time. A tanninsulfonic acid doped polyaniline (TANIPANI)-titanium dioxide nanocomposite was synthesized by an in situ polymerization of aniline in the presence of tanninsulfonic acid and titanium dioxide nanoparticles. X-ray diffraction and thermogravimetric analysis were utilized to determine the incorporation of TiO₂ in TANIPANI matrix. UV-Visible and infrared spectroscopy studies provided information about the electronic interactions among tannin, polyaniline, and TiO₂. Scanning electron microscopy (SEM) along with energy dispersive X-ray spectroscopy (EDS) and atomic force microscopy (AFM) surface analysis techniques were used to investigate the metal oxide dispersions inside polyaniline matrix. Gas sensors were prepared by spin coating solutions of TANIPANI-TiO₂ and TANIPANI composites onto glass slides. Sensors were tested at three different concentrations (20 ppm, 40 ppm, and 60 ppm) of ammonia gas at ambient temperature conditions by measuring the changes in surface resistivity of the films with respect to time. Ammonia gas sensing plots are presented showing the response values, response times and recovery times. The TANIPANI-TiO₂ composite exhibited better response and shorter recovery times when compared to TANIPANI control and other polyaniline composites that have been reported in the literature. For the first time a proposed mechanism of gas sensing basing on the polaron band localization and its effects on the gas sensing behavior of polyaniline are reported.