Coordinated charging of Plug-In Electric Vehicles (PEVs) in residential distribution systems is a new concept currently being explored in the wake of smart grids. Utilities are exploring these options as there are concerns about potential stresses and network congestions that may occur with random and uncoordinated multiple domestic PEV charging activities. Such operations may lead to degraded power quality, poor voltage profiles, overloads in transformer and cables, increased power losses and overall a reduction in the reliability and economy of smart grids. Future smart grids communication network will play an important role in PEV operation because the battery chargers can be remotely coordinated by the utility and harnessed for storing surplus grid energy and reused to support the grid during peak times. Based on a recently proposed PEV charging algorithm, this paper focuses on the impact of coordinated charging on distribution transformer loading and performance. Simulation results are presented to explore the ability of the PEV coordination algorithm in reducing the stress on distribution transformers at different PEV penetration levels. The performance of various distribution transformers within the simulated smart grid is examined for a modified IEEE 23 kV distribution system connected to several low voltage residential networks populated with PEVs.