This paper describes the morphology, stoichiometry, microstructure and gas sensing properties of nanoclustered SnOx thin films prepared by Sn evaporation followed by a rheotaxial growth and thermal oxidation process. Electron microscopy was used to investigate, in detail, the evolution of the films as the oxidation temperature was increased. The results showed that the contact angle, perpendicular height, volume and microstructure of the clusters all changed significantly as a result of the thermal oxidation processes. Electron diffraction and x-ray photoelectron spectroscopy measurements revealed that after oxidation at a temperature of 600 °C, the Sn clusters were fully transformed into porous three-dimensional polycrystalline SnO2 clusters. On the basis of these results, a prototype SnO2 sensor was fabricated and sensing measurements were performed with H2 and NO2 gases. At operating temperatures of 150-200 °C the film produced measurable responses to concentrations of H2 as low as 600 ppm and NO2 as low as 500 ppb.