Ag-modified ZnO coral-like nanosheets were synthesized for the first time using a simple hydrothermal method. Compared to other Ag-modified ZnO sensors, the sensor with 2 wt% Ag content demonstrates excellent ethanol-sensing performance. The maximum response value of 67.42 can be achieved at the optimal operating temperature of 260 °C for 100 ppm ethanol gas, with corresponding response/recovery time of 6/75 s, respectively. This sensor also exhibits superior selectivity, reproducibility, and long-term stability. Techniques such as XRD, XPS, SEM, and TEM were employed to characterize the physicochemical properties of the gas-sensitive materials. Further research indicates that the enhanced gas-sensing properties of the composite materials can be mainly attributed to the unique coral-like nanosheet structure, the relatively high-specific surface area (9.8706 m