In this study, the degradation mechanism of chip resistors mounted with Ag–epoxy isotropic conductive adhesive (ICA) under two different environmental conditions, i.e., humidity exposure (85°C/85% relative humidity) and thermal cycling (TC, –40°C to 125°C), was examined by monitoring the change in electrical resistance and by transmission electron microscopy. The effect of the terminal finishes (Sn/Ni or Au/Ni) of the chip components on joint stability during those two tests was also examined. The electrical resistance of the Sn/Ni-plated chip component joined with Ag–epoxy ICA during both environmental tests increased with exposure time. On the other hand, the electrical resistance of the Au/Ni-plated chip component joined with Ag–epoxy ICA remained unchanged during both tests. In the case of the Sn/Ni-plated chip joint, Sn oxides such as SnO, SnO2, and Sn-Cl-O were formed inhomogeneously on the surface of the Sn plating during the humidity exposure test. Under the TC test, microcracks were also observed at the Sn/epoxy and the Ag filler/epoxy interfaces. A Ni3Sn intermetallic compound (IMC) was formed at the interface between Sn and Ni, and the Ni3Sn4 IMC was also formed at the Sn surface. In contrast, no oxide was found in the Au/Ni-plated chip joint during the humidity exposure test. Also, no IMC was found in that joint during the TC test. It is suggested that oxides, microcracks, and IMCs cause the electrical degradation of Sn/Ni-plated chip components joined with Ag–epoxy ICA.