The effect of Ho2O3 doping on the electrical properties and microstructure of ZnO base varistor was investigated. It was found that Ho2O3 is an effective dopant for increasing the breakdown electric filed. The Ho2O3 doping can also improve the nonlinear performance both in low and high current area. But excessive doping of Ho2O3 will decrease the withstanding surge current. With 0.8mol% Ho2O3 doping, the varistor samples exhibit a breakdown voltage of about 400V/mm, a nonlinear coefficient of 80 and the withstanding surge current of 8/20μs, waveshape is higher than 5kA. Ho2O3 dopant can hinder ZnO grain growth and make the crystal grains more uniform.