This paper presents a method to improve the mechanical properties and breakdown strength of aramid insulation paper. By combining molecular dynamics simulation and experimental analysis, the mechanisms for these improvements were studied. By investigating the relationships between the micro parameters of the models and the nanoparticle content, the optimum nanoparticle content was established to be 1 wt.%. Subsequently, an insulation paper with the same content of nanoparticles as the simulation experiment was prepared in the laboratory and its tensile strength, breaking elongation, power frequency breakdown strength, and other characteristic parameters were tested. The results showed that the properties of the insulation paper modified by nano-SiO2 had greatly improved. Finally, the interface interaction and microscopic mechanism by which the nano-SiO2 improved the properties of the insulation paper were analyzed. On the one hand, a strong interfacial interaction formed between the nanoparticles and the aramid fiber, which allowed them to combine well; on the other hand, the addition of nanoparticles effectively reduced the free volume of the aramid fiber. Therefore, the mechanical properties, thermal stability, and electrical properties of the aramid insulation paper were improved.