Bubble formation in transformers could lead to their failure, resulting in severe outages in the electricity network. Hence, understanding the parameters that impact the bubble formation process is crucial to maintain the transformer’s dependable operation. Commonly, mineral oil and non-thermally upgraded Kraft paper have been used as the insulating materials for power transformers, and the risk of bubble formation has been studied for this material combination. However, new insulating liquids such as esters and gas-to-liquid technology-based oils are recently gaining more popularity and studies on bubble formation for these alternative liquids are limited. In this paper, the impact of alternative liquids on bubble formation has been investigated by using a small-scale test tube-based system. Studies have shown that when considering the water content in the paper at the time of bubble formation, the bubble formation temperature is comparable across different liquid types.