With the aim of application for ammonia sensing, zirconium doped ceria (Ce1−xZrxO2for 0 ≤ x ≥ 0.7) nanopowders were synthesized by solution combustion technique using glycine as fuel in stoichiometric ratio. The calcined powders (at 500 °C) were thoroughly characterized by XRD to evaluate how the structural parameters such as lattice constant, crystallite size, cell density, cell volume, strain etc. change with the increase of Zr concentration. The crystallite size is found to reduce from 20 nm to 4 nm with the increase of doping concentration. The strain in crystal, as calculated by William Hall Plots, does not increase with the increase of Zr doping beyond 40 mol%. Micro-Raman study also indicates that beyond 40 mol% doping there exist zirconia phase in the spectra; although XRD could not resolve any segregation evidence. The optical absorption study clearly indicates how the absorption coefficient changes with doping. Incidentally, the band gap is found to reduce (3.15 eV–2.85 eV) with the increase of doping due to dominant doping level transition. In addition to near band edge emission, the photoluminescence emission spectra reveal existence of defect structure with several intra-band transitions within optical band gap. As an active electrode in electrochemical gas sensor, using lanthanum gallate as electrolyte, in amperometric mode, the synthesized Zr doped ceria was found to be highly sensitive to detect ammonia gas down to 3 ppm level in the temperature range 300–450 °C. © 2016 Elsevier B.V.