Abstract: Natural ester insulating oil, with advantages of environmental protection and fire safety, is a recent hot topic as transformer insulating oil for both research and application. This paper introduces insulating oils and natural ester, reviews the technical development and international industrial standards of natural ester insulating oil. Evaluation is made regarding physical and chemical properties (viscosity, pour point, water content, acid number, oxidation stability), electrical properties (material compatibility, dielectrical property, oil dissolved gases, Kraft paper), and advantages of natural ester and its technical problems and commercial barriers. In the end, prospect of natural ester as transformer insulating oil and further directions of research are discussed.