Abstract: In order to monitor the operation state of oil-immersed power transformer on-line, a surficially modified gas-sensing material, which can be adopted for ethylene detection, one of the decomposed gases in transformer oil, was focused on based on the density functional theory (DFT) of first-principles calculation. Moreover, the gas-sensitive response characteristics of GaNNTs to C₂H₄ gas were studied after the clusters formed by doping 1~4 Pd atoms, respectively. It is found that the Pd atoms doping on the surface of nanotubes, acting as adsorption active sites, can effectively improve the adsorption performance of GaNNTs for C₂H₄ gas. Based on the calculations of adsorption structure, charge transfer, density of states, energy band structure, and molecular orbital, the gas sensing response mechanism of doped GaNNTs to C₂H₄ gas was analyzed in detail. Combined with desorption, it is found that Pd₄-GaNNTs show the best gas sensing response performance to C₂H₄. This study provides a theoretical basis for the experimental development of high-performance gas sensors for on-line monitoring of dissolved gases in transformer oil, such as C₂H₄.