FexOy-ZnO composite nanoparticles were obtained using the co-precipitation method by various ratios of Zn2+:Fe3+. Zn(CH3COO)2·2H2O and Fe(NO3)3·9H2O water solutions were used as precursors, but NH4OH as a precipitant. The optimal ratio of raw materials and synthesis conditions was determined to obtain Fe3O4-ZnO composites. X-ray diffraction analysis has shown that an increase in the Fe3+ ion concentration above optimal values leads to the formation of zinc ferrite and hematite, meanwhile the number of zinc oxide crystalline phases declines. Crystallite size determined by the Scherrer equation was in the range of 30 nm. Representative absorption bands of the Zn-O and Fe-O at 447 and 393 cm-1 in FT-IR spectra were observed. The optimal operating temperature for gas sensor was determined - 250 °C. Fe3+ and Zn2+ ion ratio in gas sensor materials affects the sensitivity of sensor. The sensitivity of FexOy-ZnO composites was higher than that of pure ZnO material. Studying the sensitivity of the samples to ethanol (concentration 500 ppm) it was observed that resistance decreased during the adsorption process and increased during the desorption process, which indicated to n-type semiconductors. Visible absorption spectrum shows that samples containing Fe(III) exhibit a redshift of spectral response as compared to pure ZnO, which is explained in terms of the ionic bond strength between the metal ions and oxygen ions. The emission spectrum of ZnO particle consists of two emission bands: the first one in 380 nm, caused by radiative annihilation of excitons, and the second one due the radiative recombination of an electron. Photoluminescence spectrum of FexOy-ZnO composites is shown as a blue shift, related to surface oxygen vacancies and interstitial Fe3+ ions in ZnO structures during the growth course. Particle sizes of the samples measured by Brookhaven instruments are in the range of 130-320 nm. It has been observed that an increase in the Fe3+ ion concentration leads to an increase in particle size, attributed to the agglomeration process due the Van der Waals forces and magnetic interaction between particles.