A power transformer is one of the most important and expensive components in any power system. Power transformers can be exposed to a wide variety of abnormal conditions and faults.Internal turn-to-turn faults are the most difficult types of faults to detect within the power transformer. The IEEE Standards documents have revealed that there is no one standard way to protect all power transformers against minor internal faults such as turn-to-turn faults and at the same time to satisfy basic protection requirements: sensitivity, selectivity, and speed.This thesis presents a new, simple and efficient protection technique which is based on negative sequence currents. Using this protection technique, it is possible to detect minor internal turn-toturn faults in power transformers. Also, it can differentiate between internal and external faults.The discrimination is achieved by comparing the phase shift between two phasors of total negative sequence current. The new protection technique is being studied via an extensive simulation study using PSCAD®/EMTDC™ 1 software in a three-phase power system and is also being compared with a traditional differential algorithm.Relay performance under different numbers of shorted turns of the power transformer, different connections of the transformer, different values of the fault resistances, and different values of the system parameters was investigated. The results indicate that the new technique can provide a fast and sensitive approach for identifying minor internal turn-to-turn faults in power transformers.