The invention belongs to the technical field of preparation of tin dioxide powder, and relates to a preparation method of silver-doped nano tin dioxide powder. The preparation method comprises the following steps of: firstly adding citric acid solution, a surface active agent and ammonia water sequentially into mixed solution of soluble tin salt and soluble silver salt, and adjusting the pH value of a reaction system to 2.5-11, and under the action of constant-temperature magnetic stirring, generating precursor sol; then, adding the precursor sol into a hydrothermal reaction kettle, putting the hydrothermal reaction kettle in a drying oven, carrying out hydrothermal reaction, taking out the hydrothermal reaction kettle after hydrothermal reaction, cooling, and sampling; and finally, cleaning, drying and grinding to prepare a finished nano tin dioxide powder product. The tin dioxide powder prepared by the method has the advantages of fewer granularity, narrow distribution range and good dispersity; and a gas sensor based on the tin dioxide powder material has good detection performance for fault gas in transformer oil.