Polythiophene (PT) and its composite with Al₂O₃ have been synthesized successfully using chemical oxidation method. The structural, morphological and chemical properties of the nanocomposites (NCs) are investigated by X-ray diffraction (XRD), scanning electron microscopy (SEM) and Fourier transform infrared spectroscopy (FTIR). The XRD spectra show the polycrystalline nature and improved crystallinity with Al₂O₃ doping concentrations. The SEM results reveal that all PT/Al₂O₃ samples form nano-dimensioned spherical structures spread uniformly throughout the surface. FTIR spectra show the shifting of some bands and appearance of some extra bands in PT/Al₂O₃ samples as compared to the pure PT indicates a complex formation between the dopant and polythiophene molecules. Optical properties are studied using UV–visible absorption and photoluminescence (PL) spectroscopy. PL spectra of pure PT and PT/Al₂O₃ samples exhibit mainly three visible emission peaks at around ~462, ~490 and ~522 nm. The two emission peaks centred at ~462 and ~490 nm in the Soret band region where as single peak at ~522 nm in the Q band emission. The NH₃ gas sensing properties have been carried out at room temperature by varying the ammonia concentration over a range of 25–650 ppm. The response is found to increase with increasing Al₂O₃ doping concentration as well as increase of ammonia gas concentrations. The highest Al₂O₃ doped PT NCs sample shows maximum sensitivity at lower concentration of ammonia gas and rapid response and recovery time.