This paper presents the numerical analysis of the voltage-current relationship of a metal-oxide surge arrester by using Finite Element Method. In the analysis as an application example, a surge arrester with 123 kV rated voltage was taken into account. The surge arrester was studied by using a 2D axisymmetrical model. The nonlinear V-I characteristics of the metal-oxide resistors was approximated by a power curve, and non-linear volume conductivity which depends on either voltage or current was defined for the resistor elements. The simulations in both AC and impulse current conditions were performed for the surge arrester. In the AC simulations, electric field and electric potentials were obtained along the resistor blocks as well as along the creepage path of the surge arrester. In the transient simulations, an impulse current with 8/20 mu s wave shape was applied to the surge arrester, and the residual voltage across the surge arrester were obtained by the proposed modeling method.