Isotropic conductive adhesives (ICA), such as Ag-epoxy pastes, have been recognized as one of the ecological alternatives to lead-bearing solders in surface mount technology (SMT) applications. Although Ag-epoxy conductive adhesives possess many advantages as an alternative, they still have several drawbacks to be clarified. The present study shows the degradation mechanism of mounted chip components with Ag-epoxy conductive adhesives under two different environmental tests: the thermal cycle between -40 and 125 degrees C and the humid exposure of 85 degrees C/85%RH. The electrical resistance of the chip component circuits during both environmental tests increased with exposure time. Under the thermal cycles, micro-cracks were accumulated at the Sn/epoxy resin interface. In addition, there were no secondary phases such as oxides at the interface. On the other hand, under the humid atmosphere, thin Sn-oxide layers were formed inhomogeneously on the surface of Sri plating joined with Ag-epoxy conductive adhesives. The formation of additional defects at the joint interface, such as micro-cracks and Sn-oxide layers, causes the interfacial degradation of the mounted chip components. The detailed degradation mechanisms of the Ag-epoxy conductive adhesive joints are to be discussed.