Uniform and monodisperse Co-doped InO nanorods were fabricated by a facile and environmentally friendly hydrothermal strategy that combined the subsequent annealing process, and their morphology, structure, and formaldehyde (HCHO) gas sensing performance were investigated systematically. Both pure and Co-doped InO nanorods had a high specific surface area, which could offer abundant reaction sites to gas molecular diffusion and improve the response of the gas sensor. Results revealed that the InO/1%Co nanorods exhibited a higher response of 23.2 for 10 ppm of HCHO than that of the pure InO nanorods by 4.5 times at 130 °C. More importantly, the InO/1%Co nanorods also presented outstanding selectivity and long-term stability. The superior gas sensing properties were mainly attributed to the incorporation of Co, which suggested the important role of the amount of oxygen vacancies and adsorbed oxygen in enhancing HCHO sensing performance of InO sensors.