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In this study, pristine and Nd-doped Fe2O3 NPs (NPs) were synthesized using precipitation method. After evaluation of sensing, the material become promising candidate to humidity detection. At room temperature, the Nd-doped Fe2O3 sensor demonstrated a better sensitivity and response time i.e. 70.74% and 32 s to 100% relative humidity (RH), over pristine sensor which showed sensitivity and response time values of 56.95% and 89 s, respectively, to the same RH value. Furthermore, the Nd-doped sensor revealed a negligible decrease in its sensitivity even after several weeks, suggesting high physiochemical stability and environmental robustness.