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Water can be an irritant to a power transformer, as it is recognized as a major hazard to the operation of transformers. The water content of a transformer insulation system comprises the water in the transformer insulation oil and in the cellulose paper. The increase in the water content in the insulation system leads to reduced breakdown voltage, accelerated aging of the oil–paper insulation system, and the possibility of producing bubbles at high temperatures. Therefore, various techniques have been applied to measure the water content in both oil and paper insulation. This article comprehensively reviews and analyzes the methods (technically or nontechnically) that have been used to monitor the water content in transformer insulation systems. Apart from discussing the advantages and major drawbacks of these methods, the accuracy, measurement time, and cost of each technique are also elucidated in this review. This review can be extremely useful to the utility in monitoring and maintaining the good condition of transformers. Based on the reviewed methods and their challenges, a few future research directions and prospects for determining the water content in transformer insulation systems are outlined, such as utilizing artificial intelligence and enhancing current techniques. [ABSTRACT FROM AUTHOR]