In this paper, the effect of Zr addition on the crystalline structure, ferroelectric and gas sensing properties of sol-gel derived barium strontium titanate (BST) thin films have been studied. Thin films of Zr doped BST were deposited by spin coating technique on silicon and platinum coated silicon wafers. Zr addition in BST thin films results in increase of lattice parameter and tensile strain due to larger ionic radius of Zr ions compared to Ti ions. However, due to slower diffusion rate inside BST lattice, the crystallite size of combined BSTZ system decreases. Reduction of crystallite size affects the ferroelectric behaviour of BSTZ thin films by influencing the polarization contribution from individual domains. This causes a decrease of the spontaneous polarization and also results in slimmer P-E hysteresis loop with increasing Zr content in the BST films. Gas sensing characteristics were tested with by exposing the films to ammonia gas. The sensitivity increases while the response times decreases with increasing Zr content in the BST films. The improvement in ammonia sensing response has been attributed to reduced crystallite size in BSTZ thin films. © 2007 Elsevier B.V. All rights reserved.