Li-doped NiO was synthesized by molten salt method. $LiNO_3$-LiOH flux was used as a source for Li doping. $NiCl_2$ was added to the molten Li flux and then processed to make the Li-doped NiO material. Li:Ni ratios were maintained from 5:1 to 30:1 during the synthetic procedure and the Li doping amount of synthesized materials were found between 0.086-0.190 as a Li ion to Ni ion ratio. Li doping did not change the basic cubic structural characteristics of NiO as evidenced by XRD studies, however the lattice parameter decreased from 0.41769nm in pure NiO to 0.41271nm as Li doping amount increased. Hydrogen gas sensors were fabricated using these materials as thick films on alumina substrates. The half surface of each sensor was coated with the Pt catalyst. The sensor when exposed to the hydrogen gas blended in air, heated up the catalytic surface leaving rest half surface (without catalyst) cold. The thermoelectric voltage thus built up along the hot and cold surface of the Li-doped NiO made the basis for detecting hydrogen gas. The linearity of the voltage signal vs $H_2$ concentration was checked up to 4% of $H_2$ in air (as higher concentrations above 4.65% are explosive in air) using Li doped NiO of Li ion/Ni ion=0.111 as the sensor material. The response time T90 and the recovery time RT90 were less than 25 sec. There was minimum interference of other gases and hence $H_2$ gas can easily be detected.