This paper presents a novel approach to diagnose interturn insulation faults in three-phase transformers that operate at different loading conditions. This approach is based on the loci of instantaneous symmetrical components and requires the measurement of three input primary winding currents and voltages to diagnose faults in the transformer. The effect of unbalance supply conditions, load variations, constructional imbalance, and measurement errors when this methodology is used is also investigated. Wing size or length determines the loading on the transformer. Wing travel and area determine the degree of severity of fault. Experimental results are presented for a 400/200 V, 7.5 kVA transformer to validate this method.