The key problem of transformer differential protection method is the method to distinguish the inrush current from short circuit current in order to prevent misoperation. The traditional method based on two harmonics amplitude ratios has a single criterion and insufficient accuracy, and thus it may cause a misoperation in some conditions. On this background, the method of phase difference discrimination is improved, and the braking ratio is utilized to set up a comprehensive braking criterion. Simulation modules are modeled in Matlab/Simulink and the transformer is simulated and checked under different operating conditions. It is shown that the criterion not only distinguish short circuit faults in different situations, but also recognize inrush currents effectively, and make corresponding protection actions for different fault types of transformers.