In this work, we have explored the sensing capabilities of a monolayer 1T-HfTe2 nanosheet for the environmental hazardous gases like CO, CO2, NO, NO2, NH3, and N2O, along with common environmental gases like O2, N2, H2, and H2O, using first-principles density functional theory and nonequilibrium Green's function (NEGF) based methods. Through a detailed study of structural, electronic, vibrational, and device properties, we analyzed the strength of interactions and charge transfers between the adsorbent surface and the adsorbate molecules and revealed monolayer 1T-HfTe2 to be selective to effectively sense the NO gas at very low bias. In the case of NO (NO2 and O2) adsorption, we identified a significant (moderate) amount of charge transfer with the 1T-HfTe2 nanosheet surface which leads to a considerable (moderate) change in the electronic structure of that surface, that in turn affects the other properties of the surface also. In particular, a semimetal to metal transition in the case of adsorption of NO, NO2, and O2 is noticed, with more prominance in the case of NO, which we believe to be a major reason behind the higher interaction of these gases with the 1T-HfTe2 nanosheet and a selective sensing for NO. Our device simulations to attain the I-V characteristics for the pristine 1T-HfTe2 surface and all the adsorbed ones give a direct way to measure the resistance change due to adsorption of these gases, which is a basic tool to detect gas in a "resistance sensor", and can also be measured experimentally. These calculations clearly indicate a significant (small) increase in the current when NO (NO2 and O2) was adsorbed on the nanosheet of 1T-HfTe2 and almost no increase for the rest of the examined gases. All together, by understanding the basic underlying principles, this work unlocks the potential selective NO gas sensing capability of the less explored transition metal dichalcogenide (TMD) 1T-HfTe2. Our work also reveals it to be an efficient NO sensor that works even at low voltage, leading to less power consumption, and can effectively find an application in environmental monitoring and various areas of the medical field. © 2020 American Chemical Society.