We report on the relationship between the degree of reduction of graphene oxide (GO) and its room-temperature methane gas-sensing response by comparing four in situ reducing agents of GO: d-glucose, sodium borohydride, l-ascorbic acid and hydrazine hydrate. We found that gas sensing based on d-glucose and l-ascorbic acid had a higher gas response than that based on sodium borohydride and hydrazine hydrate because the residues contained oxygen functional groups. The poorly conductive GO was successfully reduced in situ by l-ascorbic acid to achieve high electrical conductivity and a high methane gas response. The incorporation of tin dioxide (SnO2) into the reduced GO (RGO) further increased the gas response by the p-n junction effect. The heterostructure of l-ascorbic acid-reduced RGO-SnO2 had the highest increase in methane response due to the synergistic effect between dehydroascorbic acid and the SnO2 surface. This was inferred from density functional theory calculations with self-consistently determined Hubbard U potentials (DFT+U). Compared with the current room-temperature methane sensing and fabrication technologies, the sensing technology reported here is cheaper to produce and more environmentally friendly while retaining the best sensitivity and wider sensing range.