The role of indium trioxide (In2O3) decorated Si nanowires (SiNWs) based resistive sensor for selective detection of ethanol vapors at near room temperature has been successfully demonstrated. SiNWs samples were synthesized using metal assisted chemical etching technique and these were decorated by a thin film of indium followed by annealing. The sensing response was captured by measuring the change in resistance of the sensing layer using a Cr-Au inter-digitated-electrode (IDE) structure formed on top of the sensing layers. All sensors were tested for ethanol, acetone, iso-propanol (IPA), xylene, benzene and toluene vapours in the wide concentration range of 5-500 ppm and at different temperatures. Sensors based on SiNWs alone had displayed higher response towards acetone vapours whereas after heterojunction formation with In2O3, significant sensitivity to ethanol was depicted. In2O3 decorated SiNWs resulted in significant enhancement of the sensor response% towards ethanol at near room temperature. Minimum detection of ethanol at 50 ppm and 10 ppm was portrayed by SiNWs and In2O3/SiNWs based sensors respectively. It was concluded that sensing behaviour was a consequence of combinatory effect produced by the presence of both SiNWs and In2O3. A simple explanation with device schematic and band diagrams of the material are proposed to describe the sensing mechanism. This study demonstrates the significance of surface treatment of SiNWs and the role of heterostructures for tuning the sensing properties and development of wafer scalable sensors. © 2001-2012 IEEE.