Abstract: The acoustic emission (AE) method has been widely recognized for the detection of incipient insulation fault phenomenon (partial discharge, PD) in power transformers, nevertheless, the installation and placement of AE sensors should be taken into full consideration. In this manuscript, a three-dimensional multiphysics model was established and simulated to research the characteristics of the propagation in the transformer wall. Furthermore, a piezoelectric transducer was used to detect PD ultrasonic signals and verify the simulation results in the laboratory. To ensure the accuracy of the detection, an optical fiber sensor based on the Sagnac interference principle was designed and adopted. The variation of the amplitude of the ultrasonic signal with distance reveals the characteristics of the ultrasonic signal propagating in the transformer wall. The distribution of sound pressure on the upper and lower surfaces of the simulation model proved that ultrasonic waves propagate in the form of symmetrical Lamb waves in the transformer wall. Moreover, the amplitude of the AE attenuates due to absorption and refraction loss, and local fluctuations on account of acoustic interference. Thus, a stable signal detected by an AE sensor does not represent the absence of PD in a transformer. To improve the reliability of AE detection, it is proposed in this manuscript that repeated movement of the AE sensor is necessary to obtain a suitable measurement position. Similarly, it is necessary to adjust the position of the AE sensor in order to locate the PD source well. In addition, this study is expected to provide a theoretical analysis and a fiber sensor to address the problem of sensor placement in AE detection.