Present paper deals with a comparative performance of pure ZnO and Fe2O3-doped ZnO nanomaterials as humidity sensor. Fe2O3 doping was done for improvement of sensitivity. Characterizations of materials were done using SEM and XRD. SEM images show the surface morphology and X-ray diffraction reveals the crystallite size of sensing materials. The pellets were annealed at 500°C for 3 hours and thereafter humidity sensing studies were carried out. It was observed that as relative humidity (%RH) increases, there was decrease in the resistance of pellet for the entire range of %RH (relative humidity). Results were found reproducible for all the sensing elements. Maximum sensitivity was found to be 22.18 MΩ /%RH for Fe2O3-doped ZnO sensing elements.