Indium acetylacetonate, a β-diketonate complex, was pyrolyzed at 700 °C in inert ambient in a sealed quartz tube, to yield a powder composite of nanocrystalline In2O3 and elemental carbon (In2O3/C), as deduced from characterization by powder X-ray diffraction and Raman spectroscopy. Scanning electron microscopy shows that the metal oxide is embedded in micrometer-sized spherical structures, composed largely of carbon. The spherical entities are likely formed when the metal complex melts, decomposes, and vaporizes during pyrolysis, with the vapour condensing into spherical “droplets” as the sealed tube cools gradually to room temperature. The In2O3/C composite was tested (in pellet form) as a gas sensor, specifically the conductometric sensing of H2S. At 5 ppm of H2S, the composite shows a high response of 225% at 250 °C, with the response and recovery being swift (~ 5 s and ~ 15 s, respectively). At 250 °C, the detection limit is found to be of 500 ppb of H2S, with selectivity over NH3, NO2, CH4, and SO2 being considerable. The In2O3/C sensor also displays good cyclability. When carbon in the composite is removed by annealing it in air (550 °C, 60 min), the resulting In2O3 powder (in pellet form) shows a much poorer response to H2S at 250 °C (25% to 5 ppm), illustrating that the elemental carbon in In2O3/C enhances sensitivity to H2S. The advantages of a simple fabrication process and low power consumption make the carbonaceous composite sensor potentially useful.