Oxidative etching of graphene flakes was observed to initiate from edges and the occasional defect sites in the basal plane, leading to reduced lateral size and a small number of etch pits. In contrast, etching of highly defective graphene oxide and its reduced form resulted in rapid homogeneous fracturing of the sheets into smaller pieces. On the basis of these observations, a slow and more controllable etching route was designed to produce nanoporous reduced graphene oxide sheets by hydrothermal steaming at 200 °C. The degree of etching and the concomitant porosity can be conveniently tuned by etching time. In contrast to nonporous reduced graphene oxide annealed at the same temperature, the steamed nanoporous graphene oxide exhibited nearly 2 orders of magnitude increase in the sensitivity and improved recovery time when used as chemiresistor sensor platform for NO(2) detection. The results underscore the efficacy of the highly distributed nanoporous network in the low temperature steam etched GO.