An on-pillar distribution transformer with an internal protection function comprises a high-voltage incoming line, an oil tank and a high-voltage winding, wherein a backup fuse and a three-phase magnetic latching interrupter are arranged in the oil tank; the backup fuse is in direct connection with the insulating sleeve of the high-voltage incoming line and the three-phase magnetic latching interrupter; the three-phase magnetic latching interrupter is connected with the high-voltage winding, arranged on an inner side surface of the oil tank, and higher than the top of an iron core upper yoke of the on-pillar distribution transformer. The on-pillar distribution transformer has the advantages that two-stage protection for overloading and breakdown, over-high oil temperature protection, lower-low oil level locking and manual closing function, load current breaking and closing function and the like are realized; equipment replacement is avoided during overload protection, so that repeated use is realized, power supply is restored fast, and the management cost is low; phase-failure operation of the transformer is avoided, so as to reduce the failure rate of the transformer and improve power supply reliability; the transformer can be switched in a loaded state, so as to insulate primary side power supply; operation at high oil temperature can be avoided effectively, so as to avoid failures caused by over-high oil temperature.