Summary To improve arc sensor sensitivity and reliability, it is necessary to know how sensor characteristics vary depending on the welding circuit conditions, welding process variables, etc, since the arc sensor simply uses electrical signals ‐ the welding current and/or welding voltage ‐ to produce its outputs. This report theoretically analyses the relationships between these variables on the basis of non‐linear and linearised arc sensor models. The analyses are performed in the time and frequency domains. The results obtained suggest that the welding circuit inductance Lw has little effect on the arc sensor characteristics if the torch height variation frequency (f) is less than around 6 Hz but that its effect increases in the higher frequency range, increasing with an increasing f. The equivalent output electrical resistance of the power supply near the equilibrium point (slope of the static characteristic) Ks more strongly affects the arc sensor characteristics right across the frequency range. Any changes in the electrode wire material or welding conditions also affect the arc sensor characteristics, but less than do Lw and Ks. The real‐time behaviour of the arc sensor during welding in a V‐shaped groove is finally simulated, and the results are discussed through a combination of the arc sensor frequency characteristics and actual welding conditions. The results obtained suggest that, in the lower torch oscillation frequency range, the welding current gives better arc sensor output signals but that, in the relatively high torch oscillation frequency range, it may well be more advantageous to select the welding voltage. This is due to the fact that the current waveform generally exhibits greater asymmetry in relation to the groove centre and the current response also normally decreases with an increasing f.