ZnO nanoparticles were prepared by a simple solvothermal route by using a ethylene glycol (EG)-ethanol (E) solvent system. The shape and size of ZnO nanoparticles were tuned by changing the volume composition of the solvents and the synthesis temperature. Phase purity was confirmed by X-ray diffraction (XRD) and crystal size was determined by transmission electron microscopy (TEM). Ellipsoidal and spherical nanoparticles were obtained by varying the volume ratio of the solvents. Mostly spherical nanoparticles with average diameter of 4 nm was synthesized with higher volume fraction of EG at a lower synthesis temperature. The blueshift of room-temperature photoluminescence measurement from free exciton transition are observed for the smallest nanoparticle size that is ascribed to the quantum confinement effect. The ammonia gas sensing characteristics of the smallest diameter nanoparticles showed better sensitivity at a relatively lower temperature than that of large diameter particles.