By taking advantages of both grinding and sonication, an effective exfoliation process is developed to prepare two-dimensional (2D) molybdenum oxide (MoO3) nanosheets. The approach avoids high-boiling-point solvents that would leave a residue and cause aggregation. Gas sensors fabricated using the 2D-MoO3 nanosheets provide a significantly enhanced chemical sensor performance. Compared with the sensors using bulk MoO3, the response of the 2D-MoO3 sensor increases from 7 to 33; the sensor response time is reduced from 27 to 21 seconds, and the recovery time is shortened from 26 to 10 seconds. We attribute the superior performance to the 2D-structure with a much increased surface area and reactive sites.