<p>This study investigates the effects of direct fluorination on the dielectric, mechanical, thermal, and water absorption properties of cellulose insulating paper, with the aim of developing a novel insulating paper with a low dielectric constant. Paper samples with varying degrees of fluorination were prepared by controlling the fluorination time, and both electrical and mechanical properties were assessed. Direct fluorination successfully introduced C–F bonds and related groups onto the surface of the paper. Optimal fluorination was found to alter the molecular-level polarization, affecting the dipole moment autocorrelation function of cellulose and reducing both the mean square dipole moment and relaxation time of the paper. The power-frequency dielectric constant and loss of fluorinated cellulose insulation paper (fluorinated for 10 min) decreased by approximately 20 and 54%, respectively, compared to plain Kraft paper. Excessive fluorination was shown to negatively impact the mechanical properties of the paper; however, this can be mitigated by carefully controlling the fluorination level. Additionally, direct fluorination had minimal effect on the thermal decomposition characteristics of the paper and was effective in reducing moisture absorption by replacing –OH groups on the cellulose chains. These findings demonstrate that direct fluorination is a promising approach for producing cellulose insulating paper with a low dielectric constant and enhanced overall performance.</p>