Abstract: An on-line diagnostic method for health monitoring of a transformer. In the case of a single phase or three phase star connected transformer deformations in the winding are determined by representing the transformer winding as a lumped parameter circuit and dividing the winding into at least two sections. A first set of fingerprint values are generated to determine the location of the deformed section of the winding and the type of deformation. A second set of finger print values are generated to determine the extent of deformation of the deformed section. The location and extent of radial or axial deformation or combination of both radial and axial deformation in the winding are then determined. The change in the capacitance of the bushing of the transformer connected at the line end of the winding is also determined. The state of the insulation system of the transformer is determined by detecting partial discharge pulses in the transformer winding.