CuO is an important transition metal oxide with many practical applications such as catalysts, p-type semiconductor, solar cells, magnetic storage media and cathode materials. In this contribution, nanocrystalline CuO powders were prepared by solution reduction method using copper chloride ($CuCl_{2}{cdot}2H_{2}O$), hydrazine ($N_{2}H_{4}$) and NaOH and subsequent heat treatment. The gas sensor using nanocrystalline CuO powders showed high sensitivities to acetone and ethanol.