Many kinds of chemical decomposition processes for polychlorinated biphenyls (PCBs) have been attempted. In this work, a solvothermal process using methanol and sodium hydroxide (alkaline methanol solvent) has been developed as a mild and safety process for the dechlorination of PCBs in transformer oil. Dispersed PCBs in transformer oil, especially at low concentration, can not be dechlorinated by conventional alkaline hydrothermal treatment. However, we found that PCB concentration can be decreased below 0.5g/kg-oil (regulated value of PCBs in waste oil) by using thermal alkaline methanol solvent. The dechlorination of PCBs mainly depends on reaction temperature and initial concentration of PCBs, and the new method is particularly effective at temperatures near the critical point of alkaline methanol. Initial PCB concentration from low (200 ppm) to high (10000 ppm) range can be treated effectively. The spent solvent after reaction is easily separated from oil, and this solvent can be reused as fresh solvent. Furthermore, after dechlorination, transformer oil can be reused without decomposition and polymerization. Therefore the process proposed in this paper offers a suitable closed system for treatment of dispersed PCBs in transformer oil with high dechlorination efficiency.