This paper investigates the impacts of Plug-In Electric Vehicle (PEV) charging stations on the performance of three-phase three-leg distribution transformers. PEV charging stations are sizeable nonlinear loads because of their large rating ac-dc power conversion electronics. The resulting current harmonics can cause abnormal operation in transformers such as additional losses, reduced efficiency, temperature rise as well as premature insulation and windings failure. This could significantly impact the reliability, security, efficiency and economy of newly developing smart grids due to possible transformer outages and loss of transformer life. In order to accurately investigate these problems, a highly detailed nonlinear three-phase three-leg transformer model is implemented for this study. The model considers core nonlinearities such as saturation, hysteresis and eddy current effects as well core flux interactions and couplings in asymmetric multi-leg core structures. The impact of diode rectifier based charging stations on losses (fundamental and harmonics) and waveform distortions in power transformers is studied.