The utility model discloses a power distribution transformer potential fault early warning device comprising a current mutual inductor, a voltage mutual inductor, a power distribution transformer intelligent monitoring terminal and a background management system. The power distribution transformer potential fault early warning device is specialized for power distribution transformer current and voltage online measurement and data processing, a short circuit impedance calculated value reflecting a winding deformation fault of a power distribution transformer and a no-load loss calculated value reflecting an iron core fault of the power distribution transformer are obtained, and then the calculated values are compared with the factory value of the power distribution transformer so that the operation state of the power distribution transformer is evaluated and the potential fault is timely discovered and fault early warning is performed. With application of the device, safe operation of power distribution voltage transformation equipment can be ensured.