Distribution transformer constitutes a significant asset for any distribution power system. Short circuit currents or forces can cause mechanical faults in transformer winding. In order to discover the hidden trouble of the transformer, in this paper, on-line monitoring system based on FRA method is developed, and signal source, signal injection, system software are introduced. Furthermore, a nanosecond impulse signal generator is used to inject impulse signals through a noninvasive capacitive sensor, to realize on-line monitoring for winding deformation of distribution transformer. Finally, the monitoring system is validated by a corresponding experimental study.