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A new electrode configuration was proposed to improve the performance of color ac plasma display panels (PDPs). ITO electrodes on the front plate of a PDP were used as auxiliary sustain electrodes, which were electrically isolated from the metal electrodes by a dielectric isolation layer. When this type of PDP operates, the sustain voltage waveforms are only applied to the metal electrodes, so the ITO electrodes always lie in floating potentials. By numerical simulation, the microdischarge process in a PDP cell with floating auxiliary electrodes was analyzed, and the influence of the insulation layer thickness on the cell electrical parameters was investigated. It was found that a discharge in the cell was firstly generated at the narrow gap between a pair of floating electrodes, and then it grew into a long-path discharge including a positive column region between a pair of metal electrodes. Two 12-inch test panels having this floating-electrode-type cell structure were fabricated, together with two other test panels as references having a conventional cell structure and a regular long-gap cell structure, respectively, and their electrical and optical characteristics were measured and compared to each other. The results indicate that the PDP with floating electrodes can achieve a high luminance and a high luminous efficacy at a relatively low sustain voltage.