This study describes the preparation of ZnO based varistors by sintering a mixture of ZnO powders with small quantities of bismuth oxide at a relatively high temperature. We also investigate the influence of Bismuth oxide addition on the microstructure of zinc oxide based varistors. The ceramic microstructure was characterised by measuring density, using SEM, X-ray diffraction and EDS. Bismuth oxide doping resulted in liquid phase sintering, rapid densification and grain growth. In this study ZnO powder was prepared from zinc recovered from spent zinc carbon battery. Use of recycled zinc from waste has made the study important from both economical and environmental point of view.