The development of oxide semiconductor-based gas sensing materials that can sensitively detect benzene compounds (e.g., xylene) is highly desirable but challenging due to their inherently low chemical reactivity. Herein, we report 2D ultrathin bimetallic nickel-indium oxide nanosheets as such high-performance xylene sensing materials. The introduction of In during the synthesis induces the formation of an ultrathin In-doped NiO nanosheet morphology with a 2–5 nm thickness and high surface area (141.8 m² g⁻¹) through a topotactic transformation of NiIn-layered double hydroxide (LDH) precursors. Simultaneously, the substitution of high-valence In³⁺ in NiO leads to an electronic compensation effect, bringing a decreased hole concentration and increased chemisorbed oxygen species. The joint optimization of the morphology and electronic properties of NiO by In-doping provides more active centres for surface adsorption and the xylene sensing reaction. As a result, the In-doped NiO nanosheets exhibit much greater xylene response (R_gas/R_air = 9) than pristine NiO (R_gas/R_air < 2) to 10 ppm xylene at a low operating temperature of 160 °C.