Waste transformer oil should be managed under local hazardous waste and environmental rules, with special handling if PCB contamination is suspected. Best practice includes sampling and classifying the oil, segregating by type, using labeled sealed containers, maintaining chain of custody, and sending it to licensed recyclers or disposal facilities. Spills require containment and documented cleanup. Never burn or reuse oil as fuel unless regulations explicitly permit and testing confirms it meets criteria, because contaminants can create serious health and legal risks.