Equivalent circuit parameters of transformers are related to the condition of their windings. Information concerning winding deformations, failures, and temperature can be acquired by monitoring these parameters. Methods used for the determination of electrical parameters generally require disconnection of the transformer from the power system. In this paper, a novel method which uses real-time data of the transformer to determine its parameters is presented. Therefore, this method eliminates the need for the disconnection of the transformer from the power system. In the method, winding parameters are obtained by applying the differential equation algorithm to the fundamental frequency components of transformer data. Fundamental frequency components of the currents and voltages are computed by using the discrete cosine transform. Transformer core parameters are also computed via core losses and the polynomial curve-fitting method with the least squares error method. The proposed method has been tested and validated by simulations and experiments.