An insertion set is provided for transcutaneous placement of a sensor such as a glucose sensor at a selected site within the body of a patient. The insertion set comprises a slotted insertion needle extending through a mounting base adapted for mounting onto the patient's skin. A flexible thin film sensor includes a proximal segment carried by the mounting base and defining conductive contacts adapted for electrical connection to a suitable monitor, and a distal segment protruding from the mounting base with sensor electrodes for transcutaneous placement. The distal segment of the sensor extends within a protective cannula, a portion of which is slidably disposed within the insertion needle. Placement of the mounting base onto the patient's skin causes the insertion needle to pierce the skin for transcutaneous placement of the cannula with the sensor therein. The insertion needle can then be withdrawn to leave the cannula and sensor at the selected insertion position, with the sensor electrodes being exposed to patient blood or other extracellular fluid via a window formed in the cannula.