Transformer failure investigation is important to obtain necessary actions which prevent similar failure from happening in the future. An investigation was conducted upon the failure of a transformer in Indonesia which damaged substation apparatuses nearby. To determine possible cause of the failure, the investigation was performed by doing visual inspection after failure, further analysis on related historical assessment result data and simulation using related nameplate and actual configuration. Most historical assessment result data showed no early failure indication of the transformer, while sweep frequency response analysis (SFRA) test result showed severe deformation on both primary and secondary winding. A simulation using Transient Analysis Program for internal short circuit between winding and ground was conducted and the output waveform was identical to Digital Fault Recorder (DFR) waveform data during transformer failure. Therefore, the possible cause of transformer failure was internal arcing on primary winding to ground which could not be interrupted by the protection system. According to visual inspection after failure, the possible cause of protection system malfunction was accidental open circuit in Current Transformer (CT) secondary circuit which damaged whole CT wiring.