The concept of nanofluids has been developed for over 25 years. The challenges and opportunities of using nanofluids are analyzed by way of examples in this paper. Common measurement tools are introduced and highlighted in getting the parameters of nanofluids. A couple of formulations were studied with the addition of nanoparticles (magnetite (Fe3O4), zinc oxide (ZnO), silicon dioxide (SiO2), aluminum oxide (Al2O3), cerium dioxide (CeO2), and hexagonal boron nitride (h-BN)) into transformer oils. Special attention is paid to the dielectric property, thermal performance, and environmental impact of different concepts. The features of dispersion, agglomeration, sedimentation, oxidation stability, moisture uptake, long-term aging property and reliability are the challenges which should be well managed before the realistic application of nanofluids to power industry, such as in transformers, especially in medium and large power transformers.