In the present work, we report an proficient, elegant, and rapid one-pot synthesis of variety of 3,4-dihydropyrimidine-2(1H)-one/thione derivatives from β-dicarbonyl compounds, urea/thiourea, and various aromatic aldehydes using nano-La₂O₃ catalyst under ultrasonic irradiation. This novel synthetic strategy benefits with excellent yields, short reaction time, benign reaction conditions, clean transformation, and purification of products by non-chromatographic strategies. In addition, the synthesized nano-material was also explored as an effective gas sensor for NO₂, LPG, methyl alcohol, and ammonia. The gas-sensing properties such as selectivity and sensitivity of selected gases along with response and recovery for nano-La₂O₃ sensor are reported in this paper. In this way, conferring nano-La₂O₃ is a multifunctional catalyst not only for organic synthesis but also for gas sensing. The synthesized La₂O₃ nano-material was characterized by Fourier transform IR, powder X-ray diffraction, field-emission scanning electron microscopy, high-resolution transmission electron microscopy, energy-dispersive spectroscopy, and Brunauer–Emmett–Teller isotherm. The formation of Biginelli adducts was confirmed by Fourier transform IR, ¹HNMR, ¹³CNMR, DEPT-135 (distortionless enhancement by polarization transfer spectra), and mass spectral techniques.