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Al2O3 nanoparticles were used to improve the performance of the vital properties of transformer oil (TO) under normal operating conditions and when subjected to thermal aging. Different weight percentages of Al2O3 in the TO were considered to maximize the breakdown voltage (BDV). Al2O3 nanofluid (NF) increases the BDV by 116% (31.1 kV to 67.4 kV) and the heat transfer by 33.4%, and also minimizes partial discharge (PD) by 66%. The reduction of PD is also related to the ability of Al2O3 to adsorb hydrogen and acetylene, two oil-soluble gases that are effective in PD. Even Al2O3NF was more resistant to water content in TO. BDV for TO and Al2O3NF, when water content increased to more than 30 ppm, were reduced by 57% and 19%, respectively. According to Arrhenius equation, both samples were placed at 120°C for 29 days to age samples (equivalent to about 30 years). Aged Al2O3NF has continued its exceptional performance and improved BDV by 121% compared to aged TO, and also Al2O3NF showed its capacity well and improved PD compared to aged TO by 71%. All the favorable properties of Al2O3NF are conditional on the stability of Al2O3. FESEM confirms the stability of Al2O3.