We present a rare‐earth‐doped ZnO ceramic with nonohmic electrical properties. Analysis of the microstructure and composition indicates that the ceramic is composed of the main phase of ZnO and the second phase of rare‐earth oxides (e.g., Dy2O3, Pr6O11, Pr2O3). The average grain size is markedly increased from 3 to 18 μm, with an increase in the sintering temperature from 1150° to 1350°C. The corresponding varistor voltage and nonlinear coefficient decrease from 1014 to 578 V/mm, and from 15.8 to 6.8, respectively. The resistivity of grain and grain boundary evaluated by the complex impedance spectrum indicates that the resistivity of the grain is approximately constant (∼103Ω), and the resistivity of the grain boundary decreases. The relative dielectric permittivity of the sintered ceramic samples is much larger than that of pure ZnO ceramic, which should be ascribed to the internal boundary layer capacitance effect.