Power transformers have reached such a degree of perfection that it seems unlikely that there is room for substantial improvement in any fundamental characteristic. However, the insulation of conventional transformers is in the main dependent upon a liquid which is not only inflammable but has other undesirable characteristics. The substitution of gas for oil as the insulating medium eliminates the undesirable characteristics of the latter, and in addition, gasinsulated units have other advantages.Of the various gases having desirable properties for use in modern equipment, sulphur hexafluoride is prominent. It is produced commercially in the United States.After reviewing the advantages of gas-insulated transformers, the paper examines the fundamental characteristics of this electro-negative gas, and experimental data are presented of its electric strength relative to oil. Of considerable interest to the designer is the peculiar behaviour of gases subjected to impulse tests. It is shown that, for the same low-frequency electric strength, gas-insulated units have lower impulse strength than oil-filled transformers. This deficiency, however, can be overcome with liberal margins of safety if gas-insulated transformers are protected with modern lightning arresters.The cooling of these new transformers is by forced circulation of the gas. The thermal capacity of gas-insulated units is, of course, somewhat lower than that of oil-filled units; theoretically, it would appear that, on this account, the overload capabilities of gas-filled transformers might be much lower than those of oil-filled units. This apparent deficiency is partially nullified by the fact that the thermal ageing characteristics of conventional class-A materials used in the construction of transformers is higher in gas than in oil. Consequently, the overload capabilities of gas-insulated units compare quite favourably with those of oil-filled units cooled by forced circulation of the liquid. Two units rated at 2000kVA at 69kV are in service in New York City; a third unit rated at 10 000kVA at 69 kV is in operation at Allentown, Pennsylvania. This unit is briefly described. Several other units, some of higher apparent power and voltage are now under construction.Development is proceeding, and it appears that in the near future some very large transformers may be built which could be installed next to, or built as an integral part of, the generators, and this at considerable overall cost reduction over present practices.