The control of atmosphere content and concentration of specific gases are important tasks in many industrial processes, agriculture, environmental and medical applications. Thus there is a high demand to develop new advanced materials with enhanced gas sensing characteristics including high gas selectivity. Herein we report the result of a study on the synthesis, characterization, and investigation of gas sensing properties of In2O3–graphene–Cu composite nanomaterials for sensing elements of single-electrode semiconductor gas sensors. The nanocomposite has a closely interconnected and highly defective structure, which is characterized by high sensitivity to various oxidizing and reducing gases and selectivity to NO2. The In2O3-based materials were obtained by sol–gel method, by adding 0–6 wt% of pre-synthesized graphene–Cu powder into In-containing gel before xerogel formation. The graphene–Cu flakes played the role of centers for In2O3 nucleation and then crystal growth terminators. This led to the formation of structural defects, influencing the surface energy state and concentration of free electrons. The concentration of defects increases with the increase of graphene–Cu content from 1 to 4 wt%, which also affects the gas-sensing properties of the nanocomposites. The sensors show a high sensing response to both oxidizing (NO2) and reducing (acetone, ethanol, methane) gases at an optimal working heating current of 91–161 mA (280–510 °C). The sensor with nanocomposite with 4 wt% of graphene–Cu additive showed the highest sensitivity to NO2 (46 ppm) in comparison with other tested gases with an absolute value of sensing response of (− ) 225 mV at a heating current of 131 mA (430 °C) and linear dependence of sensing response to NO2 concentration.