A low-cost and environment-friendly surface acoustic wave (SAW) humidity sensor was fabricated on a quartz substrate using sol-gel/spin-coated sodium alginate (SA) sensing layer. The sensing mechanism is based on the frequency shift of the SAW sensor caused by both mass loading and electrical loading, with the former being the dominant factor. The SA film prepared in this study is an environment-friendly material with a large number of hydroxyl and carboxylate groups, which easily adsorb and react with H2O molecules to form hydrogen bonds. These adsorbed H2O molecules lead to significantly enhanced mass loading and signal responses of the SAW sensor. Electrical loading effect is also generated due to the transfer of hydrogen ions in the H2O molecules, which alters the electrical resistance and results in changes of resonant frequencies of the SAW device. When the relative humidity (RH) is increased from 35% to 85%, the responses of the SAW sensor with 1 wt% SA are significantly decreased. Whereas in a low humidity environment (e.g., RH <35%), the responses of the sensor show a linear relationship with the change of humidity. The developed humidity sensor shows good short-term/long-term stabilities and a low temperature coefficient of frequency.