SnO2 based sensor structures prepared by rf magnetron sputtering technique have been studied for detecting H2 gas. Pd catalyst was integrated onto the SnO2 thin film in the form of clusters and nano-particles to obtain enhanced sensing response characteristics. The prepared sensor structures have been studied over a temperature range of 50-250°C for sensing response towards 500 ppm H2 gas. The sensor with Pd catalyst dispersed in the form of nanoparticles was found to exhibit an enhanced sensing response of 1.9×103 at a relatively low operating temperature of 150°C with a fast response time of 2 s and recovery time of 65 s towards 500 ppm H2 gas. The origin of enhanced sensing response is identified in the light of the enhanced spill over of H2 gas molecules on the uncovered surface of SnO2 thin film.