The thermal effects of cavitation on hydraulic oil is very important. From a micro perspective, the evolution of bubbles, will release amount of energy, especially its collapse in high-pressure area. The energy is converted into heat, which will be absorbed by hydraulic oil, which is indirectly converted into vibration and noise, and other forms. In order to study the effect of cavitation on hydraulic oil from an energy perspective, we investigated the oxidative deterioration of surrounding hydraulic oil during the compression of cavitation bubbles by using theoretical analysis and experimental comparison methods. Firstly, the cause of cavitation heat generation in hydraulic system was analyzed. Secondly, two kinds of hydraulic oils were tested for corrosion under the environment of cavitation heat generation, and the chemical properties changes of these hydraulic oils in the simulated cavitation heat production environment were analyzed. Finally, the thermogravimetric analysis and comparison of the two kinds of hydraulic oils in a simulated cavitation heat-generating environment were performed, and obtained the reason why hydraulic oil was oxidized to form solid carbon particles. The results showed that cavitation heat generation will cause oxidative deterioration of hydraulic oil, which enhanced the corrosion of hydraulic oil, and subsequently generated solid particles in hydraulic oil. The inner surface of hydraulic components will be scratched when solid carbon particles move with hydraulic oil flow in hydraulic system. © 2013 IEEE.