Because of the increase in the transmission voltage levels, the demand for insulation reliability of power transformers has increasingly become critical. Cellulose insulating paper is the main insulating component of power transformers. To improve the insulation level of ultrahigh voltage transformers and reduce their weight and size, reducing the dielectric constant of oil-immersed cellulose insulating paper is highly desired. Cellulose is used to produce power-transformer insulating papers owing to its excellent electrical properties, renewability, biodegradability and abundance. The dielectric constant of a cellulose insulating paper can be effectively reduced by chemical or physical modification. This study presents an overview of the foreign and domestic research status of the use of modification technology to reduce the dielectric constant of cellulose insulating papers. All the mentioned methods are analyzed in this study. Finally, some recommendations for future modified cellulose insulating paper research and applications are proposed. This paper can provide a reference for further research on low dielectric constant cellulose insulating paper in the future.