Abstract: The researches on mechanism of discharges in composite insulation dielectrics are less mature than that in gases dielectrics. In this paper, the theoretical analysis and simulation study on surface discharge in oil paper insulation under AC voltage is proposed. Based on streamer theory in liquids and surface discharge process in gas, the high field density in tri-angle area of interface between high voltage polar and oil paper insulation in defect model of surface discharge can lead to initial electron emission. During physical process of surface discharge, little air bubble will be produced in oil paper insulation system under electrical, thermal and mechanical stress effects. Influencing by external electric field, electric field distortion caused by little air bubble and the electron avalanche in air bubble are the main reason that lead to the development of surface discharge and breakdown. Then the physical model based on real experiment model is built by using COMSOL finite element analysis software, the electric field distribution is determined, and such environment factors as little air bubble that influence the development process of surface discharge are analyzed. In the end, the correctness of above mechanism analysis is verified by simulation results.