Transformers are the most expensive and critical asset in any electrical power network. Their failure results in long interruption of power supply with consequent loss of reliability and revenue. Understanding and detection of the failure mechanism helps in avoiding catastrophic failures, unplanned outages and improving the power system reliability. Oil impregnated paper (OIP) and pressboards form the main soild insulation in a transformer. Life of the transformer is governed mostly by the life of OIP insulation. Until recently, it was thought that ageing of the OIP insulation in power transformer and its eventual failure, is mainly a function of temperature and electrical stresses. However, it has now been realized that the moisture causes rapid degradation of OIP and needs a special attention. Considering its practical relevance, this research program was formulated with goals: (i) to study the ageing of OIP insulation under temperature and moisture stresses, (ii) to seek correlation between diagnostic ageing indices and end-of-life (EOL) and (iii) to develop a life model for OIP considering moisture along with the thermal stress. Observing that working with actual transformers or even the prototypes are rather inordinately expensive, experiments were conducted with paper strips immersed in oil in test tubes with paper to oil ratio kept same as that in power transformers. In order to cater for the statistical nature of the phenomena, adequate numbers of test specimens were employed (25 numbers for each experiment). Experiments were conducted for two years at temperatures 90°C, 110°C & 120°C and moisture 1%, 2% & 3%. Following the literature, the degree of polymerization (DP) was chosen as the primary index for ageing. As measurement of DP is not only destructive, but also impractical on most of the working transformers, with an aim to develop suitable diagnostic indices for ageing, 2-furfural (2-FAL) and oxides of carbon (CO and CO2) were also measured. Empirical relation between ageing and amount of stresses and time have been deduced for the relevant range. Limiting value of these indices to prescribe the end-of-life, as well as, their correlation with DP have been worked out and reported. In order to bring the role of moisture explicitly, based on earlier work on multi-stress ageing, a multiplicative power law supplementing the Arrhenius factor is envisaged. Accordingly, a phenomenological combined stress model involving the time to failure, temperature, and moisture content is deduced. Based on the experimental results, this model is statistically validated and the values of parameters appearing in the model is obtained. Thus the combined stress model enables one to estimate the life of OIP insulation at any temperature and moisture under synergy. In summary, this work through experimental and analytical approach has contributed to the evaluation of the aging of OIP insulation used in power transformers under the combined action of moisture and temperature.