This paper presents an experimental study of partial discharge activity in ferrofluids based on biodegradable transformer oil and iron oxide nanoparticles. Three ferrofluid samples with low, medium and high nanoparticle concentrations are employed in the research. The basic ferrofluid characterization is followed by a partial discharge experiment exposing the ferrofluids to a high voltage in a needle-plate electrode configuration. The analysis confirms that the apparent charge and number of discharges decrease with increasing nanoparticle concentration. These findings are interpreted with reference to the well-recognised electro-hydrodynamic streamer model. The charge trapping by nanoparticles hinders the ionization and discharge development. The study also focuses on the partial discharge activity in the ferrofluids under the action of a static magnetic field acting perpendicularly to the electric field. A decreasing trend in the number of discharges due to the magnetic field is revealed. A qualitative explanation is provided based on the field-induced cluster formation and charge mobility reduction. The presented experiment and the discussed findings may be valuable for practical application of the ferrofluid in high voltage equipment with a special need for partial discharge suppression.