During operation of electrical machines at inverters with high frequency switching PWM (pulse width modulation) voltage travelling wave effects cause transients of unacceptably high amplitudes (i.e. up to two times the d.c. link voltage or even higher) at the machine winding insulation which may lead to partial discharges and, in the long term, to insulation failures. Furthermore, the very fast switching IGBT-modules in today’s inverters cause a high voltage steepness, leading to a non linear voltage distribution in the stator coils of the machine. Over the years these phenomena have been well understood and mitigation methods have been developed to effectively reduce the dielectric stress of the insulation material. Progress has been made especially in the design of filters, but such technologies also have their limits. For cable lengths of several hundred meters dv/dt filters do not affect the voltage at the machine terminals anymore because they are effective up to a specified cable length only. Sinusoidal filters always have a resonance frequency in the range of one kilohertz, and thus the inverter pulse frequency cannot be chosen below a value of e.g. 5 kHz. But for large drives pulse frequencies are often below this value, and consequently sinusoidal filters cannot be used for high power applications. Another criterion for the choice of the filter type is finally the costs which are made up on one hand from the initial investment and on the other hand from the operating costs which also include total losses. Filters always have a self inductance in the main current path of the drive, leading to additional losses. Moreover, the self inductance has to be dimensioned for the total current and power of the drive, making it very large and expensive in many cases. Metal-oxide (MO) varistors in this application are just connected line to ground in all three phases in order to reduce the line to ground overvoltage. They are not arranged in the main current path and are therefore independent from the power of the drive. The dimensioning of the varistors only depends on the surge impedance of the connecting cable and the accepted maximum overvoltage at the machine terminal. Power losses in the varistors additionally depend on the pulse frequency of the applied PWM voltage; they decrease with lower pulse frequency. These facts make the use of varistors in inverter-fed drives extremely attractive for large drive applications. However, this new kind of stress for metal-oxide varistors under permanently occurring transients sets new requirements on dimensioning rules, as well as on the specification of operating duty and accelerated aging tests. Dimensioning of a metal-oxide surge arrester in "standard" applications is firstly focused on its continuous operating voltage, Uc, and its protection level, Up, among other aspects. The ratio of Up (impulse peak value) over Uc (sinusoidal r.m.s. value) is in the range of three. In inverter-fed drives the continuous operating voltage is actually the d.c. link voltage of the inverter. But under normal operating conditions the highest occurring transient overvoltage (peak of a high-frequency oscillation) is "only" two times the inverter voltage (peak value of a rectangular pulse train). Therefore, in order to reduce this overvoltage, the conventional dimensioning rules cannot directly be applied anymore. Furthermore, in this application operation in the protection mode is not a transient but a continuous stress. Therefore, two alternative dimensioning approaches for the new varistor application are given here as follows: in the first one the varistor is dimensioned such that it will clamp the voltage with every occurring impulse independent from the operation mode of the drive (load, no load, breaking operation, etc.). Then the maximum voltage at the machine is the specified protection level of the varistor under inverter operation. But in this mode power losses in the varistor, and consequently its operating temperature are rather high. The other approach is to dimension the varistor for no or nearly no overvoltage limitation under normal operating conditions (where it will anyway have a positive effect by its high self capacitance) and for voltage limiting operation only under increased d.c. link-voltage conditions. In both approaches the large varistor capacitance, being in the range of several nanofarads, causes an increased rise time of the voltage at the machine terminal and therefore contributes to a linearized voltage distribution in the stator coils. In "conventional" applications a metal-oxide surge arrester is stressed by continuous power-frequency voltage close to its continuous operating voltage, Uc, and a current with a resistive component in the range of ten to hundred microamperes peak value develops as a "leakage current" which results in power losses of some hundred milliwatts in the varistors. During an overvoltage event the surge arrester has to absorb energy and is heated up depending on the injected energy. Under these operating conditions the thermal stability limit of the surge arrester has to be verified in an "operating duty test", specified in the relevant test standards. Due to the fact that the continuous operating conditions of varistors in inverter-fed drives consist of permanently occurring transients combined with the pulse train of the d.c. link voltage level, an operating duty test in the conventional way is meaningless. The varistor has not to recover thermally after a single transient overvoltage. It has to operate thermally stable under overvoltage stress that is permanently present. It is furthermore not sufficient to perform a conventional accelerated aging test as described in the actual standards. Instead, the actual kind of stress has to be considered because this is assumed to provoke electrical aging different from an applied sinusoidal power-frequency voltage. In order to qualify MO-varistors for this special application it is therefore suggested to combine a thermal stability verification with an adopted accelerated aging test. In this work the ageing behaviour of different materials of several varistor manufacturers is investigated in comparison of "conventional" and the new operation mode. It is clarified that there are basic differences in the operation mode and the ageing behaviour of the different varistor materials. It is one of the important results that it is not possible to conclude from the ageing behaviour under "conventional" stress to the ageing behaviour under the stress imposed by the new application. Therefore, a new accelerated ageing procedure is necessary and has been successfully developed. With respect to all advantages and disadvantages investigated and discussed in this work operation of varistors in inverter-fed drives is possible after detailed qualification of the varistor material and careful dimensioning of the applied varistors. Both a qualification procedure and dimensioning rules have been developed and are recommended for future use. With a maximum overvoltage of down to 140 % of the d.c. link voltage at a pulse frequency of 3 kHz – just to give an example here – the application of varistors constitutes an attractive alternative to and in many cases a significant improvement over conventional filter solutions.