Photoacoustic spectroscopy (PAS) has the advantages of high precision, wide detection range, no consumption of measured gas and carrier gas. It can be applied to online monitoring dissolved gas in oil for oil immersed electrical equipment. This paper analyzes the generation mechanism of gas photoacoustic signal and the spectral characteristics of dissolved gases in insulation oil. An experimental gas detection platform is devised by coupling dynamic headspace degassing with photoacoustic spectroscopy. This platform is tested with standard gas samples and standard oil sample for repeatability and accuracy tests, and an oil sample is collected from a transformer in practical operation, and the results are compared with those of a laboratory gas chromatograph (GC) system. The results meet or exceed the standards for online detection of dissolved gas in power system. Consequently, the proposed technique effectively detects dissolved gas in oil for oil-immersed electric equipment.