This study aims to use the conductivity of a synthetic polymer as the sensing probe for ethanol. In order to enhance the sensitivity of the sensor, a composite of the polymer and nickel oxide (NiO) nanoparticles was formed as it improved the conductivity. This composite exhibited 100 times more conductivity than the neat polymer. The semiconductive nanocomposite of poly [N1,N4‐bis(thiophen‐2‐ylmethylene)benzene‐1,4‐diamine]‐nickel oxide (PBTMBDA‐NiO) was prepared by in situ chemical oxidative polymerization. The monomer was N1,N4‐bis(thiophen‐2‐ylmethylene)benzene‐1,4‐diamine (BTMBDA). The monomer (BTMBDA), polymer (PBTMBDA), and NiO nanoparticles used in this study were synthesized. The monomer was prepared by refluxing together 2‐thiophene carboxaldehyde, benzene‐1,4‐diamine, and few drops of glacial acetic acid in ethanol medium for 3 h. The polymer, PBTMBDA, was formed by the chemical oxidative polymerization of BTMBDA in chloroform by FeCl3. NiO nanoparticles were prepared by slow addition of aqueous ammonia to anhydrous nickel chloride at room temperature (28 ± 2 °C), and at a pH of 8 under constant stirring condition. The composite was formed by in situ chemical oxidative polymerization of BTMBDA in chloroform by FeCl3 in the presence of the dispersed NiO nanoparticles. The molecular structure of BTMBDA and PBTMBDA were confirmed by nuclear magnetic resonance (NMR) (1H, 13C, and Dept‐90°), Fourier transform infrared spectroscopy, and ultraviolet (UV)–visible spectroscopy. The PBTMBDA and PBTMBDA‐NiO nanocomposite were characterized by X‐ray diffraction, thermogravimetric analysis, field emission scanning electron microscopy, and energy‐dispersive X‐ray spectroscopy analysis. The results of characterization studies indicate the strong interaction between PBTMBDA and NiO in the nanocomposite. The broadness of 1H NMR peaks in PBTMBDA was due to the increased number of monomer units. The disappearance of the peak of α‐hydrogens on thiophene confirms the polymerization involving the fifth position of thiophene part of BTMBDA. The Fourier transform infrared spectroscopy spectra revealed that position of the characteristic peaks of the functional groups in the monomer shifted toward lower wave numbers in PBTMBDA and PBTMBDA‐NiO nanocomposite. This shifting confirms the presence of extended conjugation along the polymer backbone. Electronic spectra of these compounds showed three absorption bands corresponding to π→π*, n→π* and n→π* transitions of π electron of carbon, lone pair electrons of S, and lone pair electrons of N (imine) groups, respectively. From the Tafel plot, the exchange current density evaluated for the BTMBDA and PBTMBDA are 0.2815 × 10−8 and 1.1508 × 10−8 A cm−2, respectively. PBTMBDA is evaluated to be a better electrode material than the BTMBDA. The X‐ray diffraction plots showed that the characteristic peak of NiO in PBTMBDA‐NiO nanocomposite suggested successful incorporation of NiO in PBTMBDA‐NiO nanocomposite. The thermogravimetric analysis revealed the improved thermal stability o...