In order to detect low concentrations of volatile organic compounds (VOCs) for the early diagnosis of lung cancer, sensors based on hollow spheres of In2O3 were prepared through the soft template method. Ag nanoparticle decorated In2O3 composites were synthesized via dipping and annealing. The microstructure, phase composition, element distribution, and state of Ag were analyzed by the scanning electron microscopy (SEM), X-ray diffraction (XRD), high-resolution transmission electron microscopy (HRTEM), and X-ray photoelectron spectroscopy (XPS). The gas sensing tests showed that Ag-In2O3 sensors had the highest response to isopropanol at 300 °C. The best response of Ag-In2O3 composite sensor was 5.2, which had a significant improvement compared with only In2O3. Moreover, the response and recovery time of Ag-In2O3 composite sensor was significantly shortened. The improved sensing properties of Ag-In2O3 composite sensor could be attributed to the Schottky barrier created at Ag-In2O3 interface and catalytical effect of Ag.