The mechanical and dielectric properties of transformer insulating paper are key factors that require close attention to ensure optimal operation. In this study, a novel approach of enhancing properties by nanocellulose modification was proposed. To investigate the effect of doping, insulating paper with different doping mass fractions of cellulose nanocrystals (CNCs) was prepared, and multiple properties of the sample were characterized. By applying a doping concentration gradient, the non-monotonic trend in performance with doping levels was revealed, and the impact of doping concentration on the data variability was investigated. The effects of CNC doping on the surface pore size of the samples were analyzed by SEM (scanning electron microscopy) and a mercury intrusion method, and the regularity of CNC dispersion uniformity with doping concentration was investigated. The Brunauer, Emmett, and Teller model was employed to fit the water vapor adsorption isotherm data, providing an analysis of the impact of doping on hydrogen bond connections and the moisture adsorption properties. Tensile strength and Young's modulus were measured and analyzed using the Page model and the Halpin–Kardos model. The tensile strength of the 6 wt. % CNC-modified paper was increased by 6.91%. 10 wt. % CNC-modified paper had a Young's modulus increase of 11.98%. 3 wt. % CNC-modified paper has a 28.53% increase in the AC breakdown field strength and an 8.72% increase in the DC breakdown field strength. The influence of CNC on the dielectric properties of the insulating paper was discussed using the Havriliak–Negami (H–N) model. The results indicate that the introduction of CNC can effectively enhance the comprehensive performance of oil-immersed insulating paper.