A systematic study of the defects in ZnO has been performed. The two commonly observed levels (L1, L2), located at around 0.15 and 0.24 eV under the conduction band, have been identified as native defects. The deep level transient spectroscopy depth profiling technique is applied on multilayer-chip-type ZnO varistors to determine the distribution profiles of these two levels. With higher densities near the grain boundary, L2 is unlikely to be zinc interstitials as some previous studies have assigned. Both L1 and L2 show no apparent correlation with the device degradation process. Instead, a complex defect or interface trap, related to impurities in the starting material, exhibits a much stronger correlation with the ZnO varistor’s stability.