The degradation of zinc oxide varistors after stressed by surges is studied. It is found that after stressed by surges the varistors show a decrease in both break-down voltage and nonlinear exponent, and an increase in leakage current. If the pulses are of the same polarity, the I-V curve of varistor will become asymmetric, i.e., the positive degradation is less than the negative degradation. Hence, the degradation will be more serious in ac circuit application. To solve this problem a solution is proposed by this paper. Furthermore, it shows that the fractional increament of reverse leakage current, due to its large variation, is a preferable parameter to represent the degree of degradation. Accordingly, the degree of degradation is observed to enhance if the period of the sintering process is too long. In addition, most of the degradated varistors after stressed by surges can be recovered to their original characteristics after annealed at 500°C for 4 hours or at 950°C for 1 hour.