Performance improvement of couple silver (Ag)-gold (Au) based bimetallic surface plasmon resonance (SPR) sensor using a thin indium phosphide (InP) layer and an air gap layer is presented. Through detailed investigations quantitative insight into the dependence of different performance parameters including sensitivity factor (SF), sensor merit (SM), full width at half maximum (FWHM) and combined sensitivity factor (CSF) on stack structure, thickness and material parameters has been observed. Integration of thin InP layer on the metallic layer and inclusion of the air gap between glass prism and adsorption layer enhance both the sensitivity (70.90 • /RIU) and the CSF (372.8 RIU −1). Without InP layer the sensitivity is 65.66 • /RIU, and CSF is 178.5 RIU −1 whereas without the air gap the sensitivity is 66.29 • /RIU, and the CSF is 285.0 RIU −1. Compared to similar bimetallic SPR sensors that have been reported in recent literatures, sensitivity and overall figure of merit of the proposed sensor are far better. The presented biosensor's capability to detect the variation of 1/1000 of RIU of the sensing medium (corresponding to subtle concentration change of the analyte) has been demonstrated.