We have investigated the room-temperature sensing enhancement of Ag nanoparticles (NPs) for multiwalled carbon nanotube (MWCNT)-based gas sensors using electrical measurements, in situ infrared (IR) microspectroscopy, and density functional theory (DFT) calculations. Multiple hybrid nanosensors with structures of MWCNTs/SnO₂/Ag and MWCNTs/Ag have been synthesized using a process that combines a simple mini-arc plasma with electrostatic force directed assembly, and characterized by electron microscopy techniques. Ag NPs were found to enhance the sensing behavior through the “electronic sensitization” mechanism. In contrast to sensors based on bare MWCNTs and MWCNTs/SnO₂, sensors with Ag NPs show not only higher sensitivity and faster response to NO₂ but also significantly enhanced sensitivity to NH₃. Our DFT calculations indicate that the increased sensitivity to NO₂ is attributed to the formation of a NO₃ complex with oxygen on the Ag surface accompanying a charge rearrangement and a net electron transfer from the hybrid to NO₂. The significant response to NH₃ is predicted to arise because NH₃ is attracted to hollow sites on the oxidized Ag surface with the H atoms pointing towards Ag atoms and electron donation from H to the hybrid sensor.