In order to realize the online monitoring of carbon monoxide gas generated by overheating or discharge failure of insulating paperboard in transformers, a detection technology of carbon monoxide gas dissolved in oil based on optical fiber photoacoustic sensing was proposed. Combining photoacoustic spectroscopy, optical fiber sensing, and membrane separation technology, a fiber optic photoacoustic sensing probe that integrates oil and gas separation and gas detection functions was designed. The carbon monoxide gas dissolved in the oil enters the miniature air cavity in the optical fiber probe through the oil and gas separation membrane. Two optical fibers were used to connect the probe to the demodulation instrument, and transmit near-infrared excitation light and probe light respectively. The photoacoustic signal generated by the absorption of light energy by the gas was detected by the optical fiber Fabry-Perot sensor and processed by the designed optical fiber photoacoustic demodulator. The detection sensitivity of the system for volume fraction of carbon monoxide gas was 0.345pm/10-6. The experimental results show that the designed optical fiber sensing system has a detection limit of 5×10-6 for the volume fraction of dissolved carbon monoxide gas in oil. This research has the advantages of high accuracy, anti-electromagnetic interference, and simple degassing, and provides a new method for detecting carbon monoxide gas dissolved in transformer oil.