Four kinds of ethylene-vinyl acetate-vinyl alcohol (EVA-OH) terpolymers containing different contents of hydroxyl groups were prepared using the transesterification reaction between a ethylene-vinyl acetate (EVA) copolymer and alcohol. Structural and thermal analyses of the EVA-OH produced were performed with Fourier transform infrared spectroscopy and differential scanning calorimetry. Electrical properties such as water treeing, AC breakdown, and dielectric loss characteristics were investigated. It was found that both water tree length and the probability of water tree generation decreased as a function of hydroxyl group content. AC breakdown characteristics such as average breakdown strength and characteristic breakdown strength (breakdown probability = 63.2%) of EVA improved as a function of the conversion rate of EVAOH from acetate to hydroxyl groups. Dielectric loss increased with hydroxyl group content in the low-frequency range. In contrast, it was observed that dielectric loss decreased with hydroxyl group content in the high-frequency range. (c) 2006 Wiley Periodicals, Inc.