With the progress and development of national economy as well as power system, reliability and safety issues of power system have been more important. Development of distribution Transformer Health Monitoring System (THMS) has been done in that reason. Distribution transformer is the most vital asset in any electrical distribution network and therefore it needs special care and attention. This THMS can monitor the health status of the distribution transformer in real time aspect. As a large number of transformers are distributed over a wide area in present electric systems, it’s difficult to monitor the condition manually of every single transformer. So automatic data acquisition and transformer condition monitoring has been an important issue. This project presents design and implementation of a mobile embedded system to monitor load currents, over voltage, transformer oil level and oil temperature. The implementation on-line monitoring system integrates Global Service Mobile (GSM) Modem, with single chip microcontroller and sensors. It is installed at the distribution transformer site. The output values of sensors are processed and recorded in the system memory. System programmed with some predefined instructions to check abnormal conditions. If there is any abnormality on the system, the GSM module will send SMS (Short Message Service) messages to designated mobile telephones containing information about the abnormality according to the aforesaid predefined instructions. This mobile system will help the utilities to optimally utilize transformers and identify problems before any catastrophic failure occurs. This system will be an advanced step to the automation by diminishing human dependency. As it is a wireless communicating system, there is no need of large cables which are of high cost. Thus THMS offers a more improved transformer monitoring.