In this study, Ag-based SnO2-reinforced electrical contact materials were produced by powder metallurgy and mechanical alloying techniques. Elemental powder mixture containing 8 wt.% SnO2 was milled in a high-energy planetary-type ball mill, to achieve homogeneously mixed composite powder, and subsequently pressed in a closed die to obtain green compacts with a cylindrical shape and then sintered under vacuum to obtain composites. Composites were then subjected to electrical wear tests under inductive loads to investigate the arc-erosion performance of electrical contacts. Surface deterioration and mass losses of electrical contacts were also evaluated, as a function of increasing switching number. Characterization of the starting and composite powders, green compacts, composites and arc-originated surface deterioration was carried out using scanning electron microscopy and energy-dispersive X-ray spectroscopy. It was found that powder particle size had decreased with the increasing milling time. Density and hardness values of the composites had increased, whereas porosity had decreased with the increasing sintering temperature. Optimum sintering temperature was determined as 900 degrees C. The arc-affected zones became bigger with the increase of the number of switching operations. Furthermore, comparison between surface morphologies and mass losses of arc-eroded specimens had revealed that the stationary contacts exhibit higher rates of erosion than the movable contacts.