Low‐temperature (3.5<T<77 °K) measurements of the dielectric constant and dissipation of ZnO ceramic varistors are presented for frequenciesfin the range 30<f<105Hz. A loss peak and dispersion in &egr; observed at 4 °K are identified as resulting from the two‐phase structure of the ZnO varistor (Maxwell‐Wagner model). We find the zinc oxide grain resistivity &rgr;ZnO∼106&OHgr; cm in a typical commercial varistor at 4.2 °K. The physical origin of a second loss peak observed in measurements around room temperature is discussed. We show the latter dispersion is not interpretable using a Maxwell‐Wagner model for an inhomogeneous conductor.