In this paper, a proposed breakdown mechanism of nanofilled transformer oil is presented. The proposed mechanism is based on electric filed distortion results from charge accumulation over the surfaces of nanoparticles when exposed to external electric field. Different factors affecting breakdown strength of nanofilled transformer oil are considered. These factors are oil temperature, type, concentration levels and size of nanofiller. Therefore, breakdown strength of nanofilled transformer oil is experimentally evaluated at 35, 70, 100 and 130 °C to simulate the real operating conditions from no load to heavy load. Accordingly, preparation of nanofilled transformer oil samples is carried out considering different nanofiller material types and concentration levels. The adopted nanofiller material types are SiO2, TiO2, and ZrO2 considering the same particle size of 25 nm. The selected material types have different relative permittivities of 4.3, 70 and 100 for SiO2, ZrO2, and TiO2, respectively. The studied nanofiller concentration levels are 0.05, 0.1, 0.2, and 0.4 g/L. Also, the effect of particle size on breakdown strength is studied considering TiO2 nanoparticles of 25 nm and 100 nm particle sizes at the adopted concentration levels. The breakdown strength test is carried out on all prepared samples according to ASTM D1816 standard for all prepared samples. The evaluation of breakdown strength is based on average breakdown voltage. Electric field distortion in the nanofilled transformer oil is validated using finite element analysis. The obtained results show that concentration levels, type, and size of nanofiller as well as oil temperature have a significant effect on breakdown voltage of nanofilled transformer oil.