Two kinds of microcrystalline silver powders were prepared under different reduction conditions, and the burning loss, particle size, specific surface area, bulk density and tap density of silver powders were tested. The results showed that the physical properties of the two kinds of silver powders are similar. The two kinds of sliver powder were applied to concoct varistor paste. The thixotropy index, printing quality, morphology, resistance, adhesion of paste layers, and grain size of silver powders were tested and analyzed. The experimental results showed that the tap density of silver powders has a great influence on the slurry viscosity, high tap density results in low slurry viscosity and vice versa. The particle size distribution of silver powder has a great influence on the slurry thixotropy, if the particle size is small and nonuniform, the thixotropy index is high and vice versa. The crystallinity and grain size of silver powder have great influence on the sintering performance of the slurry. In the similar size distribution range, the grain boundary formed by powders with high crystallinity and larger grain size is better, the sintering is more compact, the paste layer’s resistance is lower, the adhesion is better. Powder with high crystallinity and larger grain size is more suitable for preparing varistor paste.