Hydrogen sensing properties and mechanism of Nb2O5 varistors mixed with Bi2O3 (0-16.7 mol %) were investigated in the H-2 concentration range of 0.2-2.0 % at 400-700 degrees C. Pure Nb2O5 showed higher breakdown voltage and higher sensitivity of 1,200 V mm(-1) to 2.0 % H-2 at 400 degrees C than the ZnO- and SnO2-based varistors reported before. The H-2 sensitive properties of a Nb2O5 varistor were improved by the addition of Bi2O3 up to 5.0 mol % and the Nb2O5 varistor mixed with 1.0 mol % Bi2O3 exhibited the highest sensitivity at 400 degrees C among the varistors tested. However, further addition of Bi2O3 resulted in significant deterioration of the sensitivity. The addition of Bi2O3 led to a slight decrease in the grain size, a change in shape of Nb2O5 particles and formation of Bi2Nb10O28 at the surface of Nb2O5 particles. A.c. impedance measurement was performed to investigate the electric and electrochemical properties of the varistors. Resistances of the Nb2O5-Bi2O3 varistors were decomposed into four components, (i) bulk resistance (R-0), (ii) grain boundary resistance (R-1), (iii) resistance of oxide ion conduction (R-2) and (iv) electrode-oxide interface resistance (R-3) The R-1, R-2 and R-3 decreased drastically with increasing H-2 concentration, while R-0 remained almost unchanged at 400 degrees C. Further studies have confirmed that R-1 mainly dominated the breakdown voltage of the Nb2O5-Bi2O3 varistors, and then the change in the potential barrier height per grainboundary determined the magnitude of the H-2-induced shift in the breakdown voltage.