Microstructueral development and electrical properties in ZnO-Bi2O3-ZnAl2O4 system were investigated with ZnAl2O4 content(0.1~1.0 mol%). The shrinakge of specimens started around $700^{circ}C$ and finished at 110$0^{circ}C$, reaching a maximum shrinkage rate at 80$0^{circ}C$. The shrinkage rate is strongly related to the fromation of a Bi-rich liquid. The increase of the ZnAl2O4 content inhibited the grain growth of ZnO. Most of ZnAl2O4 particles located at the grain boundaries were about 2~3${mu}{ extrm}{m}$. ZnO grain size changed little up to 110$0^{circ}C$, but increased markedly above 115$0^{circ}C$, especially at lower ZnAl2O4 content. Drastic decreasing in breakdown voltage(Vb) with increasing temperature is expected to be dependent on the ZnO grain size and the distribution of the largest grains between the electrode. The nonlinear I-V characteristic was significantly influenced by the ZnAl2O4 content, which exhibited a maximum value at about 15${mu}{ extrm}{m}$ of ZnO grain size.