A comnprehensive process which combines chemical with thermal treatment by controlled counterflow oxidation has been developed for disposal of PCBs in transformer oil. PCBs which not completely removed by chemical treatment, after being filtered with appropriate adsorbent during the oil circulations, was thermally treated. Destruction efficiencies of better than 99.99% was obtained, with no measurable formation of PCDDs (polychlorinated dibenzo-p-dioxins) or PCDFs (polychlorinated dibenzofurans). The combination also permits high recovery of oil and inorganic supports from scrap power transformers. The process is environmentally benign, easy to use and less capital intensive than other available technologies.