The invention provides a transformer insulating oil. The transformer insulating oil comprises modified swill-cooked dirty oil and an antioxidant, wherein the modified swill-cooked dirty oil is prepared by successively carrying out deacidification and decoloration on the swill-cooked dirty oil. The transformer insulating oil is prepared by successively carrying out deacidification and decoloration on the swill-cooked dirty oil and then adding the antioxidant. The physicochemical property and electrical property of the transformer insulating oil, including the transparency, density, acid value and power frequency puncture voltage, conform to the technical standard GB2535-90 of the transformer insulating oil, and the power frequency puncture voltage of the transformer insulating oil is further higher than that of the mineral oil. Besides, the transformer insulating oil has favorable ageing resistance. By using the waste swill-cooked dirty oil as the material, the transformer insulating oil is low in cost, can recycle resources and is harmless to the environment. The method is simple and easy to operate and high in practicability.