Abstract: If impedance matching coefficientKZ≠3 + 1 for an impedance-matching balance transformer with differential protection based on phase current on primary side, there is inherent differential curren,t andmay result inmal-operation. Thisproblem was solved by taking the differences in phase currenton primary side as the parameters to form the operationalequations. Setting ruleswere discussed and formulaewere derived for impedance-matching balance transformersbased on the 3-slope operation characteristic, where the effects of normalmismatch curren,t current-transformer saturation and inrush currenton differential currentprotectionwere taken into consideration.