In November 2017, the first ±1100 kV high-voltage direct-current power transformer in the world, which was made by Siemens in Nurnberg, passed its type test. Meanwhile, in early 2017, a ±1000 kV ultra-high voltage (UHV) substation was officially put into operation in Tianjin, China. These examples illustrate that the era of UHV power transmission is coming. With the rapid increase in power transmission voltage, the performance requirements for the insulation of power transformers are getting higher and higher. The traditional mineral oils used inside power transformers as insulating and cooling agents are thus facing a serious challenge to meet these requirements. In this review, the basic properties of traditional mineral insulating oil are first introduced. Then, the variation of electrical properties such as breakdown strength, permittivity, and conductivity during transformer operation and aging is summarized. Next, the modification of mineral insulating oil is investigated with a focus on the influence of nanoparticles on the electrical properties of nano-modified insulating oil. Recent studies on the performance of mineral oil at molecular and atomic levels by molecular dynamics simulations are then described. Finally, future research hotspots and notable research topics are discussed.