Two bio-based insulating oils (BHOs) with average carbon chain lengths of approximately 18 and 22 were investigated as short- and long-chain BHOs. By constructing an oil-paper composite insulation system, the generation law of characteristic gases in the two systems was studied by partial discharge experiments. Based on the ReaxFF reaction molecular dynamics simulation under electrothermal coupling stress, the cracking path, cracking rate, evolution of oxygen-containing small molecules, and generation path of characteristic gases of cellulose polymer were revealed. Both systems produced H₂, CH₄, C₂H₂, C₂H₄, C₂H₆, CO, and CO₂, with CO₂ dominant and C₂H₆ least abundant. The short-chain BHO generated markedly higher amounts of H₂, CO, C₂H₂, and C₂H₄ than the long-chain BHO; after 15 min, its H₂ and CO concentrations were about 3.4- and 2.1-times those in the long-chain system, respectively. ReaxFF simulations showed that cellulose degradation in the short-chain BHO followed stepwise chain scission and continuous decarbonylation, favoring CO and unsaturated gas precursors. In contrast, cellulose chains disappeared faster in the long-chain BHO, producing more oxygen-containing organic fragments and C₁-C₅ oxygenated molecules and a higher small-molecule conversion ratio. Characteristic gas pathway analysis revealed that all seven gases could be generated from cellulose pyrolysis intermediates, and different oil environments primarily influenced gas generation behavior by altering the evolution pathways of these intermediates. These findings, at the molecular scale, elucidate the impact of BHO environments on the degradation mechanism of cellulose polymers, providing a theoretical basis for the condition assessment and design of environmentally friendly oil-paper insulation systems.