Researchers have been exploring dielectric testing techniques both in time and frequency domain for insulation condition assessment of oil-paper insulated transformers. In a practical dielectric system, dipoles are found to behave according to a distribution of elementary Debye relaxation properties. Suitable distribution density functions have been proposed to characterise such many-body interaction processes. Cole–Cole diagrams can be one of the methods for studying the nature of frequency dependency of dielectric materials of complex structure. Cole–Cole plots are commonly used for characterising different materials such as dielectric mixtures, ionic liquids, cable insulating oil, polar liquids etc. The scope of its application for assessing transformer oil-paper insulation considering distributed relaxation process has not been explored yet. The present contribution discusses mathematical formulations used for transforming the experimentally obtained time domain dielectric response test data to distribution domain and further to frequency domain for obtaining the Cole–Cole plots. Findings about the influence of various operating conditions and insulation status on the Cole–Cole diagram have been reported in this contribution. Results of tests on field transformers are also presented. This paper attempts to employ the features of Cole–Cole diagrams as potential indicators for analysing condition of the oil-paper insulation considering distributed relaxation process.