Nanostructured yttria stabilized ZrO2 (YSZ) films are prepared by electron beam deposition and subsequently characterized by using X-ray diffraction, field emission scanning electron microscopy, and UV-Vis spectroscopy. A capacitive device with Al/YSZ/Al structure acts as a sensor for analytes like ammonia solution, acetone, and alcohols. Low powered read-out system based on an astable mode frequency generator is employed for monitoring the response continuously. The YSZ capacitive sensor operates at room temperature with a decrease in frequency on exposure to ammonia solution and the response varies linearly with concentrations (1%-30%). In contrast, highly volatile analytes like acetone, ethanol, and dichloromethane exhibit an increase in frequency after the exposures. Water exposure produces no significant change in the sensor response. The unique selectivity of YSZ towards ammonia solution is attributed to the modified dielectric constant of the YSZ films due to preferential binding of water molecules to the analyte.