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Vegetable insulating oils are fire-resistant and environment-friendly liquid dielectrics. The current paper presents an experiment system to simulate moisture diffusion in the insulation system consisting of vegetable insulating oil and insulation paper. The results show the coefficient of moisture diffusion in vegetable oil-paper insulation. The present paper also discusses a new numerical method of solving the diffusion equation. Using the numerical method and the diffusion coefficient, the moisture contents in the insulation paper can be predicted. A practical and significant equilibrium time constant is proposed. Based on defining the equilibrium time constant, the relationships between equilibrium time constant and temperature, initial moisture content, and thickness of paper/pressboard are simulated. The moisture diffusion characteristics of vegetable oil-paper and that of mineral oilpaper are compared as well. The experiment and analysis results show that the diffusion rate of moisture in vegetable oil-paper insulation is about half of that in mineral oil-paper insulation.