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The conduction mechanisms of silver (Ag)-based conductive adhesives, which consist of metallic Ag particles and an epoxy resin, are discussed on the basis of transmission electron microscopy (TEM) studies and local conductivity measurements of model specimens. A small electrical current was observed in the model specimens, in which a thin epoxy layer was sandwiched between Ag electrodes. TEM observations demonstrated that the irreversible changes in the current versus voltage characteristics occurred along with microstructural changes in the Ag electrode, which was subjected to a large electrical current. Calculated equipotential lines indicated a considerable change in the electric field distribution near a small horn that was formed in the surface of the Ag electrode. The results provide useful information for understanding local conduction in the cured adhesive.