The Ta₂AlC material is designed to enhance the performance of Ag-based electrical contact materials as a reinforcement phase. With a work function of 6.7192 eV, Ta₂AlC demonstrated significantly higher values than reinforcement phase materials such as SnO₂, ZrO₂, and the commonly used MAX phase materials. Consequently, the arc erosion performance of an Ag–Ta₂AlC composite was investigated under air conditions. Gas breakdown mainly occurred due to electron avalanches, with the observation of a streamer breakdown mechanism in a strongly nonuniform field. The arc exhibited concentrated erosion on the surface of the Ag–20 vol% Ta₂AlC material, resulting in a higher arc energy. As the volume fraction of the Ta₂AlC material increased to 30% and 40%, the eroded area became more dispersed. In particular, Ag–30 vol% Ta₂AlC displayed the lowest arc energy (3.395 kJ) and shortest arcing time (33.26 ms). Among the four tested components, the Ag–30 vol% Ta₂AlC composite demonstrated superior arc erosion resistance. Oxides of Ag₂O, AgO, Ta₂O₅, and Al₂O₃ were formed through the interaction of ionized Ag and Ta₂AlC particles. By combining the electromagnetic force and plasma flow force, sputtered particles and bulges were generated on the eroded surface. These research findings contribute to broadening the applications of Ag–MAX materials in the realm of electrical contacts.