Fabrication of iron oxide/carbon nanotube composite structures for detection of ammonia gas at room temperature is reported. The iron oxide/carbon nanotube composite structures are fabricated by in situ co-arc-discharge method using a graphite source with varying numbers of iron wires inserted. The composite structures reveal higher response signals at room temperature than at high temperatures. As the number of iron wires inserted increased, the volume of carbon nanotubes and iron nanoparticles produced increased. The oxidation condition of the composite structures varied the carbon nanotube/iron oxide ratio in the structure and, consequently, the resistance of the structures and, finally, the ammonia gas sensing performance. The highest sensor performance was realized with 500 oC/2 h oxidation heat-treatment condition, in which most of the carbon nanotubes were removed from the composite and iron oxide played the main role of ammonia sensing. The response signal level was 62% at room temperature. We also found that UV irradiation enhances the sensing response with reduced recovery time.