Dependence of microstructure upon transfer stability of the powder-metallurgy copper-diamond electrical contact material with Cr and Nb addition during type-test process is investigated by optical microscope and SEM observation. During making and breaking process, micro-cracks occurred along grain boundaries under electrical and mechanical forces. Addition of cadmium into the composite increases oxidizable capability of this material, and also leads to oxide accumulation along grain boundaries. These factors reduce the reliability of electrical contacts in practice. Arc erosion quantities during commutation operation processes relates with grain size of matrix and particle size of the second metallic phase. The optimal grain size is 20 similar to 50 mu m and 10 similar to 20 mu m for niobium particles in these tests.