<p>Transformer oil gradually degrades under thermal, electrical, oxidative, and chemical stresses, leading to reduced dielectric strength, increased acidity, sludge formation, moisture accumulation, and poor heat dissipation, thereby increasing the risk of transformer failure. This review systematically examines recent studies on transformer oil reclamation and enhancement collected from major scientific databases. The review covers dielectric, thermal, physicochemical, aging, oxidation stability, and long-term performance aspects of transformer oils. A clear distinction is made between reclamation of aged oil, which restores degraded properties through corrective treatment, and enhancement of fresh oil using preventive additives to improve baseline performance and service life. The review critically evaluates antioxidants, nanoparticles, adsorbents, membrane purification, and hybrid treatment systems. Reported studies show that nanoparticle-based systems improve breakdown voltage by 25–50% and thermal conductivity by 5–25%, while adsorbent reclamation reduces acidity by 40–90% and moisture content by 30–80%. Antioxidant systems effectively suppress oxidation, reduce sludge formation, and improve oxidation stability. Hybrid systems combining nanoparticles, antioxidants, and adsorbents demonstrate synergistic improvements in dielectric strength, thermal stability, and insulation reliability. The review also highlights key limitations including nanoparticle agglomeration, long-term stability concerns, adsorbent disposal, membrane fouling, and lack of standardized evaluation methods. Future research should focus on eco-friendly materials, AI-assisted diagnostics, real-time monitoring, and standardized aging protocols for sustainable and large-scale transformer oil management.</p> Graphical abstract <p></p>