‘in situ’ polymerization of polyaniline (PANI) was carried out in the presence of magnesium chromate (MgCrO4) to synthesize PANI/ceramic (MgCrO4) composite. These prepared composites were characterized by XRD, FTIR and SEM, which confirm the presence of MgCrO4 in polyaniline matrix. The temperature dependent conductivity measurement shows the thermally activated exponential behaviour of PANI /MgCrO4 composites. The decrease in electrical resistance was observed when the polymer composites were exposed to the broad range of relative humidity (ranging between 20 and 95% RH). This decrease is due to increase in surface electrical conductivity resulting from moisture absorption and due to capillary condensation of water causing change in conductivity within the sensing materials. PANI / MgCrO4 composites are found to be sensitive to low humidity ranging from 20 to 50% RH.