We report a dual functional sensing mechanism for ultrasensitive chemoresistive sensors based on SnO2-ZnO core-shell nanowires (C-S NWs) for detection of trace amounts of reducing gases. C-S NWs were synthesized by a two-step process, in which core SnO2 nanowires were first prepared by vapor-liquid-solid growth and ZnO shell layers were subsequently deposited by atomic layer deposition. The radial modulation of the electron-depleted shell layer was accomplished by controlling its thickness. The sensing capabilities of C-S NWs were investigated in terms of CO, which is a typical reducing gas. At an optimized shell thickness, C-S NWs showed the best CO sensing ability, which was quite superior to that of pure SnO2 nanowires without a shell. The dual functional sensing mechanism is proposed as the sensing mechanism in these nanowires and is based on the combination of the radial modulation effect of the electron-depleted shell and the electric field smearing effect.