© Springer International Publishing Switzerland 2016. Transformers are very important components in electricity transmission and distribution networks. Its insulating oil sampling analysis, such as dissolved gas analysis, is generally used as a maintenance tool for determining transformer working condition, but requires time consuming preprocessing steps. Here, we propose an in-situ transformer health diagnosis technique without the need for oil sampling using laser Raman spectroscopy. In our method, degradation indicators present in oils are detected by direct laser irradiation into the oil. As an oil-specific degradation indicator, we demonstrated the Raman spectroscopic identification of C2H2gas dissolved in oil. This technique was also capable of successful identification of CO and furfural—a paper-specific degradation indicator in oil samples. The results show that laser Raman spectroscopy is a useful alternative method for diagnoses of the transformer faults.