Aniline detection is of great importance in many industries, but most of the aniline sensors suffers from tedious and time consuming process. Herein, we present an efficient aniline sensor based on Pd decorated ZnO nanomaterials. Ultrathin ZnO nanosheets were synthesized by a facile one-step hydrothermal method. The nanosheets were corrugated into a unique agaric morphology, endorsing the nanomaterials with high surface area that is ideal for gas sensing applications. The obtained ZnO nanosheets were then uniformly decorated with uniform Pd nanoparticles (Pd NPs) around 5 nm in diameter. Gas sensing experiment on the ZnO decorate with different amount of Pd nanoparticles were systematically evaluated. The sample decorated with 0.3 % Pd NPs (Pd-ZnO-0.3) exhibited the highest sensitivity to aniline, which is about two orders higher than that of the pure ZnO nanosheet. The gas sensor based on Pd-ZnO-0.3 has a detection limit to aniline down to 0.5 ppm, with very short response and recovery times of 29 s and 23 s, respectively to 100 ppm aniline. First-principles DFT study was employed to provide the sensing mechanism. The improved sensing performance could be attributed to the increasing adsorbed oxygen and tunable band alignment for Pd-ZnO materials. This work provides new insights to the design strategy of Pd-decorated ZnO nanomaterials for high performance gas sensors.