This work presents the effect of nanoparticles (Al₂O₃ and TiO₂) on methyl ester synthesized from palm kernel oil for oil-filled power equipment. It investigates the loss tangent, AC conductivity, and AC breakdown strength of the methyl ester-based nanofluid. The surface of the nanoparticles was functionalized with oleic acid before dispersing it into methyl ester to modify the stability of the mixture. Scanning electron microscopy coupled with electron dispersive X-ray was done on the two nanoparticles to know the morphology and elemental composition of the nanoparticles. The preparation of nanofluids was achieved through the dispersion of 0.2, 0.4, 0.6, 0.8, and 1wt% of nanoparticles into the ester. It was observed that the loading of the two nanoparticles reduces the loss tangent and the AC conductivity of methyl ester but with a pronounced enhancement in Al₂O₃ nanofluid. The Weibull statistical analysis of the breakdown data shows that the dispersion of the nanoparticles in the base fluid increases the characteristic breakdown strength of the ester with an optimum performance at 0.6 wt%. The characteristic breakdown strength for TiO₂ and Al₂O₃ nanofluid is 60.6 kV and 64.1 kV, respectively. The result revealed that Al₂O₃ nanofluid possesses the highest dielectric properties with low loss, low conductivity, and high characteristic breakdown strength which makes it a better replacement for mineral insulating oil.