In this study, the dielectric breakdown strength of magnetic nanofluids based on transformer mineral oil for use in power systems is reviewed. Nano oil samples are obtained from dispersion of the magnetic nanofluid within uninhibited transformer mineral oil NYTRO LIBRA as the base fluid. AC dielectric breakdown voltage measurement was carried out according to IEC 60156 standard and the lightning impulse breakdown voltage was obtained by using the sphere–sphere electrodes in an experimental setup for nano oil in volume concentration of 0.1–0.6%. Results indicate improved AC and lightning impulse breakdown voltage of nano oil compared to the base oil. AC test was performed again after applying impulse current and result showed that nano oil unlike the base oil retains its dielectric properties. Increase the dielectric strength of the nano oil is mainly due to dielectric and magnetic properties of Fe 3 O 4 nanoparticles that act as free electrons snapper, and reduce the rate of free electrons in the ionization process.