Nanocrystalline TiO2 modified with Nb has been produced through the sol-gel technique. Nanopowders have been obtained by means of the hydrolysis of pure alkoxides with deionized water and peptization of the resulting hydrolysate with diluted acid nitric at 100 C. The addition of Nb stabilizes the anatase phase to higher temperatures. XRD spectra of the undoped and the Nb-doped samples show that the undoped sample has been almost totally converted to rutile at 600 C, meanwhile the doped samples present still a low percentage of rutile phase. Nanocrystalline powders stabilized at 600 C with grain sizes of about 17 nm have successfully been synthesized by the addition of Nb with a concentration of 2% at., which appears to be an adequate additive concentration to improve the gas sensor performances, such as it is suggested by the catalytic conversion efficiency experiments performed from FTIR measurements. FTIR absorbance spectra show that catalytic conversion of CO occurs at lower temperatures when niobium is introduced. The electrical response of the films to different concentrations of CO and ethanol has been monitored in dry and wet environments in order to test the influence of humidity in the sensor response. The addition of Nb decreases the working temperature and increases the stability of the layers. Also, large enhancement of the response time is obtained even with lower working temperatures. Moreover, humidity effects on the gas sensor response toward CO and ethanol are less important in Nb-doped samples than in the undoped ones.