The combination of unique properties offered by materials on the nanoscale with the increased role of surface chemistry in nanostructured solids makes core-shell nanoparticles extremely attractive for application to "smart" thin-film coatings. Sensing properties of nanoparticle-based thin films were studied in several systems containing organic-coated semiconductor and metallic particles. In semiconductors, the interaction of organic shell and/or thin-film "matrix" with the environment results in changes in the nanoparticle's surface states, altering the optical properties of the thin film. Measuring the electrical properties of thin films composed of metallic cores with hydrocarbon shells offers another mechanism to monitor the local environment through the swelling of the hydrocarbons in the presence of external compounds. These mechanisms and their potential application to novel sensors will be discussed.