This thesis is concerned with the surface discharge behaviour at the oil-pressboard interface. For large transformers this is classified as a serious failure mode because it can lead to catastrophic failure under normal AC voltage operating conditions. To increase understanding on this failure mode, a surface discharge experiment at the oil-pressboard interface has been conducted on different moisture levels in pressboard by applying a long period of AC voltage stress. The processes in the surface discharge at the oil-pressboard interface until the appearance of a first full discharge have been recognised and correlated with the measured data. The results show that the different moisture levels within the pressboard play an important role on the partial discharge (PD) activity of certain processes. The decreasing trend in the PD data during the surface discharges cannot be treated as a reliable condition monitoring measure of health because it is the key indicator of white marks propagation toward the earth point. The characteristics of full discharge events have been analysed to develop knowledge for condition monitoring of surface discharge at the oil-pressboard interface. Full discharges are corona-like events in which their random occurrences are dominated by accumulated charges on the pressboard surface along the white marks rather than the polarity of applied AC voltage. A 2-D axial symmetry surface discharge model has also been developed using COMSOL Multiphysics, a finite element analysis (FEA) software package. The model considers the pressboard region near the interface (a transition region) as porous, whilst in the bulk region of pressboard as a perfect insulator. The model is developed using continuity equations and coupled with the Poisson’s equation to study the problem in terms of charge transport mechanisms and electric field distributions. The thermal conduction equation is included to study the thermal effects of surface discharge activity at the oil-pressboard interface. The behaviour of surface discharge is studied by validating the simulated surface discharge current pulse with the measured current. The simulation results show that a field dependent molecular ionisation mechanism plays an important role in the streamer propagation during the period of the rising front of the current pulse, whilst during the period of decaying tail of the current pulse, the contribution of an electron attachment process is dominant. The modelling results suggest that degradation marks (white and black marks) are due to high energy over long periods of partial discharge events that lead to thermal degradation at the oil-pressboard interface