The performance of distribution transformers serving several residential networks with multiple Plug-In Electric Vehicle (PEV) charging activity is studied in this paper. Distribution transformers are the weakest link in distribution systems that could soon be subjected to increasing stresses from PEV charging activity. This could significantly impact the reliability, security, efficiency and economy of newly developing smart grids due to possible overloads, additional losses and poor voltage regulation in transformers. In order to accurately investigate these problems, a detailed model is implemented for all distribution transformers in a smart grid system. The model implements a full equivalent circuit representation of the transformer considering winding and core losses as well as leakage flux and magnetizing reactances. A detailed 1200 node test system topology consisting of a radial high voltage (23 kV) distribution feeder with several low voltage residential networks populated with PEVs is implemented for this study.