Cloing and hypermutation of immune theory were used in optimization on particle swarm optimization (PSO), an immune particle swarm optimization (IPSO) algorithm was proposed , which overcome the problem of premature convergence on PSO. IPSO was used in BP Neural Network training to overcome slow convergence speed and easily getting into local dinky value of gradient descent algorithm. BP Neural Network trained by IPSO was used to fault diagnosis of power transformer, it has high accuracy after experimental verification and to meet the power transformer diagnosis engineering requirements.