Synthetic ester oil (SEO) is becoming a replacement for mineral oil in transformers due to its biodegradability and for its better insulation properties. Silica nanoparticles dispersed in SEO can increase its corona inception voltage (CIV) and breakdown voltage compared to pure SEO. Physico-chemical studies were carried out to understand the characteristics of nanoparticles and nanofluids. Methodical experimental studies were carried out to understand the corona discharge activity in SEO based nanofluid. A ultra-high frequency (UHF) sensor was used to identify corona activity and it is concluded that the UHF signal radiated from corona activity in SEO and nanoparticle dispersed SEO have a bandwidth in the range of 700 MHz to 2 GHz. A comparative study on the CIV of SEO and nanofluid under harmonic AC voltages has been carried out, which indicates a reduction in the CIV as the total harmonic distortion of the supply voltage increases. Phase resolved partial discharge analysis indicates that the magnitude of discharges formed in nanofluid is much lower than in the SEO. Comparative statistical analysis are made with the breakdown voltages of the synthetic ester oil and nanofluid. A comparative analysis on the energy of the UHF signal due to the corona discharges is performed. © 1994-2012 IEEE.