Incorporating noble metal nanoparticles on the surface or the inner side of semiconductors to form a hybrid nanostructure is an effective route for improving the gas sensing performance of the semiconductors. In this study, we present novel Au-decorated ZnO nanospheres (Au-ZnO NSs) obtained by the laser irradiation of liquids. Structural characterization indicated that the Au-ZnO NSs consisted of single crystalline ZnO NSs with a few Au nanoparticles decorated on their surfaces and abundant encapsulated Au nanoparticles with relatively small sizes. Laser irradiation-induced heating-melting-evaporating processes are responsible for the formation of unique Au-ZnO NSs. The gas sensing properties of the Au-ZnO NSs, as gas sensing materials, were investigated and compared with those of pure ZnO NSs. The former showed a lower working temperature, higher sensitivity, better selectivity, and good reproducibility. The response values of the Au-ZnO NS and pure ZnO NS sensors to ethanol of 100 ppm were 252 and 75 at a working temperature of 320 °C and 360 °C, respectively. Significant enhancements in gas sensing performance should be attributed to the electronic sensitization induced by the depleted layers between the encapsulated Au nanoparticles and ZnO and chemical sensitization originating from the catalytic effects of Au nanoparticles decorated on the surfaces that dissociated molecular oxygen.