Review for research in a specific field plays an important role to find out the future scope of research work in that direction. This paper gives an extensive review about the application of optical sensors for condition monitoring of transformers. Monitoring of different parameters of transformer oil using optical sensors as a part of transformer condition monitoring has been discussed. In addition, classification and sensing principle of different optical sensors is also described. This paper also attempts to present few methodologies adopting for condition monitoring of power transformer. Keywords:Transformer, Optical fiber, Condition monitoring