Introduction. Power transformers are the most important and the most expensive equipment used in transport and distribution of electrical energy. Their failure results in huge economic losses. Despite the great advances in the design of power equipment in recent years, the feeble link in the chain remains the insulation weakness of coil turns of the power transformer. The novelty of the proposed research consists in the development of a new procedure for diagnosing and localizing the occurrence of turn to turn short-circuits in the windings of three-phase power transformer. The main problems of the current differential relay are short circuits of one or more turns of a transformer winding. Hence a new approach using' the amplitude comparison between the negative sequence currents' is developed and a digital discriminator internal / external fault is applied to discriminate turn to turn faults among the other ones. The proposed procedure is based on the exploitation of the negative sequence currents. The purpose of using this new procedure is to identify small faults inside power transformer coils and to distinguish inner faults from the outer faults by using an ameliorate circuit. The method used in this paper is a novel algorithm which based on the comparison between the negative sequence current amplitudes and to calculate the corresponding phase angle shifts. The performance of the proposed procedure has been confirmed by MATLAB/Simulink environment. The results of simulation reveal the efficiency of the suggested procedure, and indicate that this procedure can provide fast and sensitive approach for detecting low level turn-to-turn faults.