The most critical equipment in an electrical transmission and distribution network is the power transformer. These transformers are sized based on the power and voltage level they handle, while isolation and cooling inside the transformer become more complicated with the increase of the transformer’s volume. Mineral-based oil has already proven itself in terms of its excellent dielectric and thermal properties and is the most common insulating fluid used in transformers for insulation and cooling purposes. In recent years, however, due to concerns on environmental impact, cost increase, and safety, alternative oil technologies have been sought for the replacement of mineral-based oils, and in this regard, intensive research efforts have emerged on biological oils for use in the transformers. In this paper, the use of bio-based ester oil in transformer applications was investigated comparatively with the currently used mineral oils in terms of sustainability, safety, and electrical performance. Chemical and electrical properties of ester oil were compared with those of mineral oil. Furthermore, detailed electrostatic simulations on a transformer utilizing bio-based ester oil performed in BEST A.Ş Company are also presented. Initial results from the electrostatic simulations show that the ester oil exhibited promising electrical performance; however, there were some issues that still need to be addressed before its use can become widespread in transformer applications. Finally, suggestions on possible solutions for discussed issues and future research direction on bio-oil based transformers are presented.