A novel fiber-optic acoustic sensor using an erbium-doped fiber amplifier (EDFA)-based fiber ring laser and a balanced Sagnac interferometer for acoustic sensing of the partial discharge (PD) in power transformers is proposed and demonstrated. As a technical background, an experimental investigation on how the variations of the fiber birefringence affect the sensor performances was carried out, and the results are discussed. The operation principles are described, and the relevant formulas are derived. The analytical results show that an EDFA-based fiber ring laser operating in chaotic mode can provide a degree of polarization (DOP) tunable light beam for effectively suppressing polarization fading noises. The balanced Sagnac interferometer can eliminate command intensity noises and enhance the signal-to-noise ratio (SNR). Furthermore, it inherently operates at the quadrature point of the response curve without any active stabilizations. Several experiments are conducted for evaluating the performances of the sensor system, as well as for investigating the ability of the detection of high-frequency acoustic emission signals. The experimental results demonstrate that the DOP of the laser beam can be continuously tuned from 0.2% to 100%, and the power fluctuation in the whole DOP tuning range is less than 0.05 dBm. A high-frequency response up to 300 kHz is reached, and the high sensing sensitivity for detections of weak corona discharges, as well as partial discharges also is verified.