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The no load iron loss in laminated transformer cores is always greater than the nominal loss of the electrical steel laminations, as measured in an Epstein square or a single strip tester, by a factor known as the building factor. It is as important to improve the building factor of the transformer cores as it is to attempt to improve the basic properties of the steel since it is meaningless to build a transformer with a poor building factor using good quality steel. In this paper an attempt has been made to break down the measured loss of a 100 KVA 3 phase distribution transformer into several components to obtain a good indication of the most important parameters which affect the building factor. Forty two percent of the loss was found to occur in the limbs and yokes, whereas, the loss in the T-section areas accounted for only five percent. The losses due to the third harmonic circulating flux, the mean stress level and the stacking method were estimated to be 10%, 17% and 18% respectively. The unaccounted loss of eight percent could be partly attributed to the higher harmonics and possibly some errors in estimation.