We have studied the geometric microstructure as well as the elemental composition and distribution of SnO2-based polycrystalline sensors with X-ray diffraction and surface spectroscopic techniques. Electrical properties and responses against reducing gases are characterized by a.c. and d.c. measurements of resistances and/or conductances. The models explaining the high sensitivity of polycrystalline SnO2 against reducing gases in terms of changes of the intergrain conductivity have been completed. The Schottky-barrier mechanism of the electron transport across the grain boundaries is valid only for SnO2 grains larger than the Debye length of electrons. For grains smaller than the Debye length, the band bending at the surface can be neglected compared with the overall shift of the Fermi level in the grain during gas exposure. From combined measurements of conductances, work function changes and catalytic activities as functions of temperature, CO and H2O partial pressures, we deduce that OH dipoles, which do not influence the oxidation kinetics of carbon monoxide, are formed during interaction with water at 673 K.