The degradation mechanism of ZnO varistors was investigated by using spectral analysis of deep-level transient spectroscopy (SADLTS), and using the current-voltage (I-V) characteristics and the capacitance-voltage (C-V) characteristics before and after AC biasing stress. The interface states in the Pr-type ZnO varistors consist of two adjacent levels: T0 and T1 levels. The activation energy E T and the capture cross section of the interface states decrease with increasing degradation induced by AC bias stress. The decrease in E T and is related to a decrease in the barrier height caused by the degradation. In order to characterize the change in the interface states with degradation, distribution parameters (ÁE T , Á) are introduced, where the parameters for each level increase after degradation. The degradation is closely related to the distribution of the emission rate of the interface states. The degradation phenomenon is caused by migrated ions or by adsorbed ions such as oxygen. The increase in the distribution parameters upon degradation suggests activation of the oxygen ions at the grain boundaries and nonuniform migration.