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In paper, a fault diagnosis method of power transformer based on the radial basis function (RBF) neural network and clustering is discussed. It uses the clustering algorithm to decide centers of the radial basis function, and then uses least mean square (LMS) to calculate the output weights between the hidden layer and output layer. After decided the architecture of the artificial neural network, uses the history data of power transformer to test the proposed diagnosis system. From the testing result, it can be concluded that the proposed method is efficient in transformer fault diagnosis.