A silver base electrical contact material with superior resistance to arc erosion along with improved wear and welding resistance. The contact material consists essentially of 0.5 to 39.9 wt % of nickel, 0.14 to 7.0 wt % of nickel oxides, and balance silver. The material contains not less than 0.4 wt % of nickel responsible for constituting minute nickel and nickel particles which have a particle size of not more than 1 .mu.m and are dispersed in a silver matrix for strengthening the material to give improved wear and welding resistance. The dispersed minute nickel oxide particles are included to stabilize arcing occurring at the time of opening and closing contacts in such a manner as to anchor one end of an arc substantially at any immediately available point over the entire contact surface as soon as the arcing occurs, thereby preventing the arc end from moving violently across or beyond the contact surface and therefore minimizing arc related damages or arc erosion. The contact material is made in accordance with a novel method which can disperse the minute nickel and nickel oxide particles in adequate quantities and eliminate the inclusion of undesired bulk and coarse nickel particles which would otherwise deteriorate the contact properties.