This paper dealt with the propagation characteristics of acoustic signals produced by partial discharges and the positioning of PD origin in insulation oil to develop insulation diagnostic techniques of oil-immerged transformers. Electrode systems such as needle to plane, plane to plane, and particle electrodes were fabricated to simulate some defects of power transformers. In addition, the frequency spectrum and propagation characteristics of acoustic signals with partial discharge (PD) in insulation oil were analyzed. Although there were differences based on the type of defect, the frequency spectra of the acoustic signals measured by wide and narrow band acoustic emission (AE) sensors were distributed in the range of 50 kHz-400 kHz. Therefore, a narrowband AE sensor is suitable for the diagnosis of oil-immersed power transformers. We could find the position of the PD source with an error margin of 10% in the experiments by calculating the position of the PD occurrence using the time difference of arrival measured by five AE sensors.