The surface adsorbed oxygen-mediated gas sensing mechanism endows traditional n-type metal oxides with desired performance. However, inherent highly active lattice oxygen of p-type metal oxides will contribute to enhanced gas sensing property, but the distinct roles of these species remain elusive. Here, we demonstrate that partially substituting Co3+ in Co3O4 by Fe3+ (0.84 wt.%) triggers the activation of lattice oxygen, exhibiting superior acetone sensing performance. The introduction of Fe sites induces a charge transfer from Fe to Co, effectively modulating the local coordination and elevating the spin state of Co3+ from low-spin (LS) state (t2g6eg0) to high-spin (HS) state (t2g4eg2). Specifically, the optimized 1Fe-Co3O4 sensor exhibits an outstanding response value of 41.7 to 100 ppm acetone, which is approximately 6.07 times higher than that of pristine Co3O4 (5.9), along with excellent repeatability, stability, and selectivity. Experimentally, spectroscopic analysis (XPS, O2-TPD) and reaction studies (acetone-TPSR) demonstrated that active lattice oxygens are identified as active sites, not conventional adsorbed oxygen species, verified by achieving response value of 17.2 for 1Fe-Co3O4 sensor to 20 ppm acetone in Ar atmosphere. This work enables us to underscore the critical importance of lattice oxygen for p-type metal oxides-based gas sensors, offering profound insights into the gas-sensing mechanism.