This paper focuses on an experimental investigation of arc plasma in a liquid metal current-limiting device based on pinch effect. A specially designed experimental setup is employed to observe the dynamic process of arc initiation and arc evolution. From the frames obtained by high-speed photography, the mechanism of arc initiation is revealed. It indicates that the arc ignites due to the self-pinch effect, which starts from the free surface of liquid metal and develops in the form of gas cavities. According to the analysis of the subsequent stage after arc ignition, it can be concluded that the arc plasma should be a mixture of metal vapor and air. With the morphological changes of the arc, the arc evolution can be classified into four stages. The arc erosion on electrodes is observed during the arc process, and its causes are analyzed in detail. Using a liquid metal current-limiting device, the arc characteristics during the current limitation are investigated. It is found that the duration of the prearcing stage and the arc voltage are influenced by the pass-through current. As prospective current increases, the prearcing time reduces because of the acceleration of the pinch process and the arc voltage rise due to the adequate arc burning.