A direct synthesis of varistor-grade doped ZnO powder was attempted by simple hydrolysis followed by low-temperature refluxing (80 °C) in aqueous and alcoholic media. Rod like, one-dimensional nanocrystalline doped ZnO powders with crystallite size 24 nm and Brunauer-Emmett-Teller (BET) bulk surface area 22 m2 g-1 were synthesized. Sintering characteristics of these powders were analyzed under step-sintering coupled with rapid heating up to 1050 °C. The microstructural features and I-V characteristics of the step-sintered doped ZnO were compared with composite varistors. The study shows the advantage of the addition of nanosize doped varistor-grade ZnO as well as step-sintering for controlling grain size and improving varistor performance.