Composites of cerium oxide (CeO$_2$) and magnesium aluminate (MgAl$_2$O$_4$) were prepared by the moltensalt synthesis (MSS) method at 1130 K. The composite samples were named as MA, MAC0.07 and MAC0.14 (at CeO$_2$:0, 0.07 and 0.14 g in MgAl$_2$O$_4$, respectively) and these were characterized by X-ray diffraction and energy-dispersiveX-ray analyses. It is seen that the microstructure of the composite samples are quite similar except for a small increasein particle size. The energy-dispersive X-ray analyses provide the presence of concentration of Ce, Mg, Al and O in thecomposite. Scanning electron microscope, coupled with energy-dispersive X-ray analysis (SEM-EDAX) was used to identifythe morphology, microstructure and elemental composition of the prepared samples. The decomposition and dissociationreactions of the precursors were determined using differential thermal and thermogravimetric analysis (TGA). A lone pairof the electron state was identified from the electro paramagnetic resonance spectrum. An optical energy band gap of 3.3 eV was calculated from the UV–Vis absorbance spectra. The gas response to changes in oxygen (O$_2$), carbon monoxide (CO) (at 0.5, 1.0 and 1.5 bar) and ethanol (at 50 and 100 ppm) was quantitatively analysed in all the samples at differentoperating temperatures (300-500 K). The magnitude of the temperature varied linearly regardless of the gas pressure insidethe chamber, by increasing the supply in the heating pad, mounted below the sensor sample. The composite samples indicatea good response to different gases with detection of the smallest change in gas pressure.