A rotary transformer includes a primary core having a primary coil wound thereon, and a secondary core having a secondary coil wound thereon, the cores being mounted for relative rotation about an axis of rotation. The transformer is characterized in that one of the cores includes a plurality of core segments arranged in spaced-apart relation relative to one another in a substantially circular array about the axis, and the other core has a substantially annular configuration. In a particular embodiment, the primary core is fixed and hence remains static during operation, and includes a plurality of spaced apart core segments arranged in a circular array around the axis.