To address the problem of on-line dissolved gas analysis (DGA) of a power transformer, a Fourier transform infrared (FT-IR) spectrometer was used to develop an analysis instrument. Carbon monoxide (CO), carbon dioxide (CO2), methane (CH4), ethane (C2H6), ethylene (C2H4) and acetylene (C2H2) were the analytes for the FT-IR spectrometer while propane (C3H8), propylene (C3H6), propyne (C3H4), n-butane (n-C4H10) and iso-butane (iso-C4H10) were the interferents, which might exist in the dissolved gas but are not currently used as analytes for detecting an internal fault. The instrument parameters and analysis approach are first introduced. Specifically, an absorption spectra reading approach by switching two cone-type gas cells into separate light-paths was presented for reducing the effects of gas in the gaps between gas cells and spectrometers, scanning the background spectrum without clearing the sample cell, and increasing the dynamics. Then, the instrument was tested with a standard gas mixture that was extracted from insulation oil in a power transformer. The testing results show that the detection limit of every analyte component is lower than 0.1 μL/L, and the detection limits of all analytes meet the detection requirements of oil-dissolved gas analysis, which means that the FT-IR spectrometer may be an ideal instrument due to its benefits, such as being maintenance-free and having a high stability.