AC contactor is responsible for breaking, control function in the power system, whose operating status is of great importance to the safe operation of the entire power system. The Gamma process model is established for the simulation data of the AC contactor and the residual life prediction is carried out. First, three sets of single-contact arc erosion test data can be obtained by MATLAB, and we calculate the accumulated arcing energy per 100 cycles. Secondly, the frequency histogram and the empirical distribution function graph of the cumulative arc erosion data are fitted with the Gamma distribution density curve and the cumulative curve respectively, and the Pearson χ2 fit goodness test is made. The results prove that the Gamma process can describe the performance of AC contactor degradation process. Finally, the residual life prediction based on the Gamma process model and the error analysis is carried out for the simulation data. Through the analysis, the relative error of life prediction is mostly below 10%, less than 20% the highest, which can meet the engineering needs and improve the prediction accuracy.