The sintering, defect and grain boundary characteristics of Bi-based ZnO chip varistor (1,608 mm size) have been investigated to know the possibility of lowering a manufacturing price by using 100 % Ag inner-electrode. The samples were prepared by general multilayer chip varistor process and characterized by shrinkage, SEM, current-voltage (I-V), admittance spectroscopy (AS), impedance and modulus spectroscopy (IS & MS) measurement. There are no problems to make a chip varistor with 100% Ag inner-electrode in the sintering temperature range of 850∼900℃ for 1 h in air. A good varistor characteristics (Vn= 9.3∼15.4 V, a= 23∼24, IL= 1.0∼1.6 μA) were revealed but formed Zn(i)·· (0.209 eV) as dominant defect, and increased the distributional inhomogeneity and the temperature instability in grain boundary barriers.