As promising sensing materials, reduced graphene oxide (RGO)-based nanomaterials have drawn considerable attention in the fields of gas monitoring owing to their low operating temperature. However, constructing RGO-based room-temperature gas sensors possessing ppb-level limit of detection with high sensitivity remains challenging. In this work, a series of highly sensitive NO2 sensors were fabricated using α-Fe2O3 and SnO2 co-decorated RGO hybrids (designated as α-Fe2O3/SnO2-RGO) as sensing materials. They were rationally synthesized by a one-pot hydrothermal method. Compared to SnO2 modified RGO hybrids (SnO2-RGO with bandgap of 3.88 eV), the bandgap energy of α-Fe2O3/SnO2-RGO hybrids (3.53 eV) was reduced by adding α-Fe2O3; the narrower bandgap facilitated the sensing materials to release more electrons and form more oxygen ions at room temperature. Besides, the high carrier migration of RGO, which served as continuous phase, identical structure with ultrasmall particle size of α-Fe2O3 and SnO2 (about 3–6 nm), and abundant chemisorbed oxygen species on the surface (20.8%) of the sensing materials, as well as their suitable bandgap (3.53 eV) in the sensing materials, significantly improved NO2 response at room temperature. Among the sensors fabricated, α-Fe2O3/SnO2-RGO-15-based NO2 sensor had the highest response of 7.4 with a short response time of 59 s towards 1 ppm NO2; it could even reach a response of 2.6 towards 100 ppb NO2. Notably, α-Fe2O3/SnO2-RGO-15 sample has excellent capability to recognize NO2, where the response value (7.4) towards 1 ppm NO2 is about 7 times higher than that of 100 ppm ammonia and common volatile organic compounds (formaldehyde, toluene, ethanol and acetone). Such NO2 sensor has superior repeatability with negligible response deviation towards 1 ppm NO2 for four reversible cycles. This makes it to have a great potential application in the field of NO2 detection.