The effect of Fe2O3 addition on the densification and electrical properties of the (0.9895 - x) SnO2 + 0.01CoO + 0.005Nb(2)O(5) + xFe(2)O(3) system, where x = 0.005 or 0.01, was considered in this study. The samples were sintered at 1300degreesC for 2 h. Microstructure analysis by scanning electron microscopy showed that the effect of Fe2O3 addition is to decrease the SnO2 grain size. J x E curves indicated that the system exhibit a varistor behavior and the effect of Fe2O3 is to increase both, the non-linear coefficient (alpha) and the breakdown voltage (E-r). Considering the Schottky thermionic emission model the potential height and width were estimated. Small amount addition of Fe2O3 to the basic system increases both the potential barrier height and width.