The sensing characteristics of a yttria-stabilized zirconia (YSZ)-based sensor utilizing a NiO sensing-electrode (SE) towards toluene (C7H8) and interfering gases (C3H6, H2, CO, NO2 and C2H5OH) were evaluated with a view to selective C7H8 monitoring in indoor atmospheres. The fabricated YSZ-based sensor showed preferential responses toward 480 ppb C2H5OH, rather than the target 50 ppb C7H8 at an operational temperature of 450 °C under humid conditions (RH ⋍ 32%). To overcome this limitation, the catalytic activity of Cr2O3, SnO2, Fe2O3 and NiO powders were evaluated for their selective ethanol oxidation ability. Among these oxides, SnO2 was found to selectively oxidize C2H5OH, thus improving C7H8 selectivity. An inline pre-catalytic cell loaded with SnO2 powder was installed upstream of the YSZ-based sensor utilizing NiO-SE, which enabled the following excellent abilities by selectively catalyzing common interfering gases; sensitive ppb level detection of C7H8 lower than the established Japanese Guideline value; low interferences from 50 ppb C3H6, 500 ppb H2, 100 ppb CO, 40 ppb NO2, as well as 480 ppb C2H5OH. These operational characteristics are all indicative that the developed sensor may be suitable for real-time C7H8 concentration monitoring in indoor environments.