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A unique apparatus has been constructed that replicates the electro-mechanical conditions of an interphase barrier region of a 3-phase transformer at 1/9th scale. The FEM of transformer electric field profiles have been analyzed to design shaped electrodes enabling the replication of the electric field using single voltages. Experiments show that oil-gap discharge is dependent upon a chain of events requiring a source of charge from earth (through degraded or damaged insulation), high moisture content (or pollution) to allow charge transport, and an overvoltage. The mechanism is the interphase electric field that drives charge along the EDL with moisture (or pollutant) as a key transport mechanism. This process is characterized by discontinuous and random predischarge activity with surface tracking as a symptom. Oil-gap discharge is initiated by some excess stress such as an overvoltage (e.g., a lightning strike) that exceeds the capability of the insulation for local energy storage. The results suggest that oil-gap discharge is a traveling arc and raises the possibility for the phenomenon to occur elsewhere. Oil-gap discharge was created under extreme conditions of 3 × overvoltage, 3 × maximum moisture content (at 7.5%), and with a bare earth representing degraded insulation. This gives transformer designers and operators a comfortable factor of safety. Further work is needed to better quantify the margin of safety in terms of the three parameters.