The sensing properties of titanium oxide have been tailored through doping with niobium and dispersion of nanosized Au particles. The microstructural features of the gold-titania composite system were investigated by transmission electron microscopy and the electronic properties of Au nanoparticles were specifically investigated by electron holography. Holography provides quantitative determination of the mean inner potential with the high spatial resolution attained by transmission electron microscopy. Large increase of the mean inner potential has been measured for ultra small Au particles arising from the nano-scale assembling. Electrical tests were performed at low operating temperatures and demonstrated the considerable enhancement of CO sensitivity owing to the extremely high catalytic activity of gold particles.