Differential relays are used extensively to provide protection for power transformers. Several issues must be considered in their application to ensure adequate protection. These include transformer magnetizing inrush current, relay burden and current transformer performance. The use of low ratio current transformers in high magnitude fault applications can produce distorted secondary waveforms to the relay whose performance may be directly affected. There is also a relationship between the magnetizing inrush and current transformer performance which may affect the operation of the differential relay. This paper discusses these specific applications and the testing of a transformer differential relay under conditions of saturated CTs using the Electro-Magnetic Transient Program (EMTP)