In this study, the geometric and electronic properties of the In₂O₃/NbS₂ heterostructure and its potential for NO₂ gas detection and sensing were investigated using density functional theory (DFT) calculations. The calculations of adsorption energy, charge transfer, and density of states reveal a significant interaction between the heterostructure and the NO₂ molecule. The calculated adsorption energy for the NO₂ molecule in its most stable configuration is –0.84 eV. Furthermore, based on Bader charge analysis, the NO₂ molecule gains 0.325 electrons from the surface, indicating notable interaction between the molecule and the surface. Analysis of the projected density of states also confirms strong orbital hybridization between the atoms of the molecule and the surface. The considerable changes in the electronic properties of the heterostructure following adsorption suggest In₂O₃/NbS₂ as a promising candidate for the design of high-sensitivity and high-selectivity NO₂ gas sensors.