As the demand for environmentally friendly and renewable liquid insulators continues to grow, this study aims to evaluate the potential of peanut seed oil as an alternative insulating oil for transformers. The main focus of this research is to address the influence of temperature and water contamination on dielectric strength, as well as to examine the physical characteristics of the oil, including viscosity, density, and moisture content. The method employed is a quantitative experimental design conducted in a laboratory setting using a BAUR Oil Tester DPA, with testing procedures referring to IEC 60156 standards. Data collection involved temperature variations ranging from 30°C to 70°C and the addition of 2 ml of water as a contaminant. The results show that the average breakdown voltage of pure peanut seed oil is 15.5 kV, which remains below the standard set by SPLN 49-1:1982 of 30 kV/2.5 mm. However, increasing the temperature to 70°C significantly enhanced the breakdown voltage to 31.8 kV, making it the only condition that met the SPLN standard. In contrast, the addition of water reduced the breakdown voltage to an average of 13.2 kV. Furthermore, the measured density and moisture content also failed to meet the SPLN 49-1:1982 requirements. Among all parameters tested, only the viscosity met the standard, recorded at 16.3 cSt compared to the required minimum of 40 cSt. Thus, peanut seed oil shows potential as an eco-friendly insulating liquid at elevated temperatures, although further refinement is needed. This study contributes to the development of local plant-based insulating materials and opens opportunities for future research on oil quality optimization processes.