Electricity is an important constituent in our life. Now on Every moment of our life depends upon electricity. In recent calendar, electrical power system is spread all over the world from cities to village hence there is supply of large electrical power from generating station to the end consumers. The most crucial and important equipment of transmission and distribution of electric power is transformer. In power systems, an electrical equipment distribution transformer directly distributes power to the low-voltage users and its operation condition is an important criterion of the entire network operation. Transformers have a long life, if they are operates and managed under rated conditions. As transformer is a combination of many parts, this all parts must be checked regularly to maintain the transformer in perfect operating conditions. It is essential to monitor the operating condition of distribution transformer when it is loaded. Overloading, oil temperature, load current and ineffective cooling of transformers are the major causes of failure in distribution transformer. Its operation condition is an important component of the entire distribution network operation. Operation of distribution transformer under rated condition guarantees their long life and efficiency. However their life is significantly reduced if they are subjected to overloading, Abnormality in distribution transformer is accompanied with variation in different parameters like Winding temperature, Oil temperatures, ambient temperature, Load current, Oil flow and Moisture. SCADA system for monitoring of distribution transformer is costly. When a transformer fails, an adverse effect occurs in the continuity of transmission and distribution systems resulting in increase of power system cost and decrease of reliability in electric delivery. The transformer need to protection against transformers overload, transformers faults and protection against internal fault. The GSM based monitoring of distribution transformer is quite useful as compared to the manual operating system. In case of manual monitoring system it is not possible to monitor the oil level, rise in oil temperature, rise in ambient temperature, load current regularly. Manual monitoring does not gives current value of some parameters like overload current and overheating of transformer oil. The use of mobile networks and GSM devices such GSM modems and their decreasing costs have made them an attractive option that is integrated with standalone single chip embedded system to monitor and record key operation indictors of a distribution transformer like load currents, transformer oil and ambient temperature. An online-monitoring system is used to collect and study temperature data over time. This system is based on embedded we are using microcontroller embedded systems are self-contained programs that are embedded within the hardware.