Methane (CH4) sensitivity of zinc oxide (ZnO) thin film has been studied in the present work. The sensor element comprises of a chemically fabricated ZnO semiconducting layer and a layer of palladium (Pd) as catalyst. The catalyst layer was formed on the surface of semiconducting ZnO following a wet chemical process from palladium chloride (PdCl2) solution. Fundamental features of a sensor element e.g. sensitivity, response time and recovery process has been studied. The effect of operating temperature on performance of the sensor material has been investigated and a choice of optimum temperature was made at around 200oC. The sensor element exhibited reasonable sensitivity of about 86% at this temperature in presence of 1 vol% methane (CH4) in air.