Single grain‐grain junction measurements of the current‐voltage characteristic of ZnO ceramic varistors are interpreted in terms of electron transmission through depletion layer barriers at the ZnO grain interface. The highly nonlinear varistor conduction process is associated with an abrupt thinning of the ZnO depletion layer due to valence‐band hole injection when the bottom of the ZnO conduction band in the grain interior drops below the top of the valence band at the grain surface.