Oil-impregnated cellulose insulation polymer (oil-paper/pressboard insulation) has been widely used in power transformers. Establishing effective ways of improving the physical and chemical properties of the cellulose insulation polymer is currently a popular research topic. In order to improve the charge injection inhibition and hydrophobic properties of the cellulose insulation polymer used in power transformers, nano-structure zinc oxide (ZnO) and polytetrafluoroethylene (PTFE) films were fabricated on a cellulose insulation pressboard surface via reactive radio frequency (RF) magnetron sputtering. Before the fabrication of their composite film, Accelrys Materials Studio (MS) software was applied to simulate the interaction between the nanoparticles and cellulose molecules to determine the depositing sequence. Simulation results show that the ZnO nanoparticle has a better adhesion strength with cellulose molecules than the PTFE nanoparticle, so ZnO film should be sputtered at first to fabricate the ZnO/PTFE composite film for better film quality. The sputtered, thin films were characterized by X-ray photoelectron spectroscopy (XPS), scanning electron microscopy (SEM), and X-ray diffraction (XRD). The space charge injection behavior and the hydrophobicity performance of the untreated pressboard; and the cellulose insulation pressboard with sputtered nano-structure ZnO, PTFE, and the ZnO/PTFE functional films were compared with each other. X-ray photoelectron spectroscopy results showed that ZnO, PTFE, and ZnO/PTFE functional films were all successfully fabricated on the cellulose insulation pressboard surface. Scanning electron microscopy and XRD results present the nano-structure of the sputtered ZnO, PTFE, and ZnO/PTFE functional films and their amorphous states, respectively. The ZnO/PTFE composite functional film shows an apparent space charge suppression effect and hydrophobicity. The amount of the accumulated space charge in the pressboard sputtered ZnO/PTFE composite functional film decreased by about 40% compared with that in untreated cellulose insulation pressboard, and the water contact angle (WCA) increased from 0° to 116°.