Abstract The effect of Sm 2O 3 on the microstructure and non-linear electrical properties of (Co, Nb)-doped SnO 2-based varistors was investigated. The addition of Sm 2O 3 improved the non-linear characteristics of (Co, Nb)-doped SnO 2-based varistors. The threshold electric field ( E B ) of SnO 2-based varistors increased significantly from 5340 to 12,460 V cm −1 and the mean grain size decreased from 4.7 μm to 1.7 μm as Sm 2O 3 concentration increased up to 0.20 mol%. There was an optimal value (0.20 mol%) of the Sm 2O 3 concentration. The sample doped with 0.20 mol% Sm 2O 3 had the highest non-linear coefficient ( α = 28). The addition of Sm 2O 3 reduced the relative density of (Co, Nb)-doped SnO 2-based varistors.