Conducting polymers are excellent host materials for nanoparticles of metals and semiconductors. PANI-Ag-Co nanocomposite was prepared by chemical oxidative polymerization of aniline monomer in the presence of nitric acid. PANI-Ag-Co thin films were deposited on the glass substrate using spin-coating technique. The films were characterized by UV-Vis spectroscopy, XRD, AFM and TEM to analyze the internal structure and surface morphology. The performance of the sensor was conducted using I–V measurement to obtain the changes in the current before and after the incubation with E. coli bacteria in water. In UV-visible absorbance bands, a single peak appears at 421.6 nm in each band indicating the Ag-Co alloy nanoparticles were formed. The peaks in the XRD patterns show the crystals are oriented along (111) planes for Ag while (200) plane for Co. AFM images indicate the surface roughness of the PANI-Ag-Co films decreases when the concentration of Co increased. TEM image shows spherical shaped of Ag-Co alloy particles with diameter in the range of 6 – 10 nm. I–V measurements show that the current change of the films increased when incubated in E. coli. The sensitivity on E. coli increases as we increase the Co concentration. PANI-Ag-Co nanocomposite thin films can be explored further for microbial sensor application in future study.