Micro-water is one of the main factors leading to the deterioration of transformer oil-paper insulation, so it is important to discuss the affecting mechanism of micro-water in the pyrolysis process of oil-paper insulation. In this paper, a compound molecular model of oil-paper insulation was established, and on the basis of reactive molecular dynamics, the pyrolysis process of oil-paper insulation containing micro-water was simulated. The affecting mechanism of water molecules in different pyrolysis stages of oil-paper insulation was investigated, and the roles of hydrogen ions and hydrogen radicals in the pyrolysis process were analyzed. The results show that in the oil-paper insulation composite model containing micro-water, the initial formation time of small molecules such as water and hydrogen molecules is earlier, and their formation rate and quantity are higher than that of the oil-paper insulation composite model without micro-water. By analyzing the reaction path, it is found that at the initial stage, water molecules firstly destroy the hydrogen bond network of insulating paper, and with the increase of high temperature time, the water molecule act as a catalyst to promote the pyrolysis of insulating paper. As the reaction proceeds, water molecules as carriers carrying hydrogen carboxylate ions diffuse into the insulating oil, which promotes the pyrolysis of insulating oil. During the reaction process, the hydrogen carboxylate ion has the effect of accelerating the insulation pyrolysis, and which can accelerate the pyrolysis of oil-paper insulation synergistically with water molecules, while the hydrogen radical does not have the accelerating effect.