Monitoring the operating condition of electric utility assets is a critical step in achieving smart grid asset management strategy. Amongst, power transformer is a key component of a successful transition to a smart grid. However, preparing these important assets for smart grid is to some how sophisticated and requires providing condition monitoring by integration of online and off line data as well as extraction of useful information for comprehensive diagnostics, performance assessment, lifetime estimation, maintenance optimization. To cover this matter, in this paper an online monitoring system implemented by Niroo research institute(NRI) of Iran is presented. Furthermore, some important issues in applying transformer condition monitoring for smart grid are discussed.