Electrospun nickel ferrite (NiFe2O4) nanofibers reinforced polyaniline (PANI) composite was prepared by electrospinning and in-situ polymerization for ammonia (NH3) sensing at room temperature. The sensitivity, response, and selectivity of the NiFe2O4/PANI composite nanofibers-based sensor were evaluated at room temperature. NiFe2O4/PANI composite nanofibers was found to be highly selective with fast response (15–54 s) and recovery (21–65 s) time for different parts per million/billion from 250 ppb to 100 ppm of ammonia. NiFe2O4/PANI composite nanofibers have showed highest response 30.8 for 100 ppm ammonia which is nearly three times higher than that of pristine PANI. Further, the ammonia gas sensing mechanism for p-n heterojunction between PANI as p-type semiconductor and NiFe2O4 as n-type semiconductor have been systematically discussed. Adsorption kinetics related to ammonia adsorption has been proposed for NiFe2O4/PANI composite nanofibers-based ammonia sensor.