ZnO-based ceramic varistors containing NiO range 0.5 mol% to 4.0 mol% were fabricated by standard ceramic techniques. The influence of NiO on the microstructure and electrical behavior of ZnO varistor was investigated. As the content of NiO additive increases, average grain size decreased from 16.5.mu.m to 13.2.mu.m, and the amount of NiO existing in the grain interior and grain boundary region was approximately equal. NiO acted as an acceptor which decreases donor concentration due to the increase of Zn vacancy in the grain, and as a driver which migrates Zn interstitial in the depletion region toward the interface of grain boundary, which resulted in the decrease of interface state density. As a result, increasing the content of NiO additive, barrier height, nonlinear exponent, and varistor voltage decreased, and leakage current increased. Wholly, the physical and electrical properties of the ZnO varistor can be said to be affected by the NiO additive.