The demand for highly sensitive and selective gas sensors has been steadily increasing, driven by applications in various fields such as environmental monitoring, healthcare, and industrial safety. In this context, ternary alloy indium aluminum nitride (InAlN) semiconductors have emerged as a promising material for gas sensing due to their unique properties and tunable material characteristics. This work focuses on the fabrication and characterization of InAlN nanorods grown on sapphire substrates using an ultra-high vacuum magnetron sputter epitaxy with precise control over indium composition and explores their potential for acetone-gas-sensing applications. Various characterization techniques, including XRD, SEM, and TEM, demonstrate the structural and morphological insights of InAlN nanorods, making them suitable for gas-sensing applications. To evaluate the gas-sensing performance of the InAlN nanorods, acetone was chosen as a target analyte due to its relevance in medical diagnostics and industrial processes. The results reveal that the InAlN nanorods exhibit a remarkable sensor response of 2.33% at 600 ppm acetone gas concentration at an operating temperature of 350 °C, with a rapid response time of 18 s. Their high sensor response and rapid response make InAlN a viable candidate for use in medical diagnostics, industrial safety, and environmental monitoring.