Optical spectroscopy techniques were presented recently as a condition assessment tool for power transformer insulation. They are simple, non-destructive and inexpensive. Researchers applied different spectroscopy techniques for condition assessment of insulation paper, mineral and ester oils. Among these techniques, Ultraviolet-Visible (UV-Vis) technique showed promising results in correlation with some dielectric, physical, chemical properties and aging by-products. However, this technique is not very sensitive especially with complex mixtures as insulating oils. Thus, photoluminescence spectroscopy (PL) was introduced for condition assessment of the insulating oils. PL spectroscopy is more sensitive, simple and can be implemented online using compact and inexpensive sensors. In this paper, several insulating oil samples were aged with different durations and were tested using PL spectrometer to obtain their PL spectra. The impact of aging on the PL spectra is investigated. Moreover, parameters deduced from the PL spectra were correlated to the dielectric dissipation factor and aging by-products deduced from UV-Vis spectroscopy test. Finally, a new criterion based on PL spectroscopy is introduced for condition assessment of insulating oil. The new criterion specifies the acceptable limits for the parameters deduced from the PL spectra.