Transformer oil can be separated into naphthenie and aromatic fractions by percolation through silica gel. The following properties of the fractions have been determined : d-e conductivity, viscosity, viscosity index, interfaeial tension, acid number, steam emulsion number, refractive dispersion, and molecular type. The behavior of these fractions in an arc is discussed with reference to the formation of gases, the production of carbon, and the structural changes of the molecules of the fractions.