Sensitive and selective detection of ammonia at room temperature is required for proper environmental monitoring and also to avoid any health hazards in the industrial areas. The excellent electrical properties of reduced graphene oxide (RGO) and sensing capabilities of SnO2 were combined to achieve enhanced ammonia sensitivity. RGO-SnO2 films were synthesized hydrothermally as well as prepared by mixing different amounts of hydrothermally synthesized SnO2 nanoparticles with graphene oxide (GO). It was observed that the response of the hybrid sensing layer was considerably better than intrinsic RGO or SnO2. However, the best performance was observed in the 10:8 (RGO-SnO2) sample. The sample was exposed to nine different concentrations of ammonia in the presence of 20% RH at room temperature. The response of the sensor varied from 1.4 times (25 ppm) to 22 times (2800 ppm) with quick recovery after purging with air. The composite formation was verified by characterizing the samples using field emission scanning electron microscopy (FESEM), X-ray diffraction (XRD), X-ray photoelectron spectroscopy (XPS) and high resolution transmission electron microscopy (HRTEM). The results and their significance have been discussed in detail. © The Royal Society of Chemistry 2015.