AbstractThe change in flashpoint, volume resistivity and dielectric strength of 2‐ethylbutyl silicate ester (2‐EBSE) based and 1‐decene dimer polyalphaolefin (PAO) based fluids were measured as a function of initial water content and temperature. The PAO fluid was found to be stable while the 2‐EBSE fluid degraded to alcohol which significantly reduced its flashpoint. This was found to occur even with trace quantities of water present. Volume resistivity and dielectric strength were shown to be inadequate monitoring techniques for determining the extent of hydrolytic degr