A hydraulic fluid or hydraulic liquid is the medium by which power is transferred in hydraulic machinery. Common hydraulic fluids are based on mineral oil or water. Examples of equipment that might use hydraulic fluids are excavators and backhoes, hydraulic brakes, power steering systems, automatic transmissions, garbage trucks, aircraft flight control systems, lifts, and industrial machinery.

Hydraulic oil is a fluid that has several functions. It serves as an energy transfer or power transmission medium, lubricant, and sealant. Also, it is a fluid that cools the equipment and carries contaminants away.