A transformer is an electrical device that transfers electrical energy between windings by electromagnetic induction while producing a considerable amount of heat in circuits. The heat produced in windings is removed by an appropriate heat transfer fluid such as liquid dielectrics. The cooling and insulating of a liquid dielectric depend on the properties of the oil filling the transformer. One of the approaches to enhance the thermal and dielectric properties of transformer oil is employing an appropriate nanoparticle in a transformer. In this paper, a three-phase distribution transformer is simulated three-dimensionally in order to study the heat transfer efficiency for pure oil (single phase) and nanofluid (TiO2 nanoparticles-transformer oil). For both models, the electromagnetic field in solid sections and heat transfer in fluid and solid sections of the transformer are simultaneously investigated. The simulation results show that the presence of TiO2 nanoparticles in the transformer oil increases the heat transfer coefficient, i.e. adding 1% (vol/vol) of TiO2 nanoparticles to the transformer oil increases the Nusselt number from 2.17 to 2.49, while the maximum temperature of transformer components decreases from 47.20 degrees C to 43.05 degrees C. (C) 2018 The Society of Powder Technology Japan. Published by Elsevier B.V. and The Society of Powder Technology Japan. All rights reserved.