Experimental experiences prove that partial discharge (PD) is a major source of inner insulation system failure in power transformers. If the deterioration of the insulation system caused by PD activity can be detected at an early stage, preventive maintenance measures may be taken. Due to the complex structure of the transformer, accurate determination of PD location is one of the major challenges in front of power utilities. This problem comes to be vital in open access systems. A hybrid transformer model and its application for locating partial discharge and studying its propagation along the transformer windings are proposed in this article. It is based on the structural data of the transformer for equivalent model parameters determination. The lumped parameter equivalent model for winding sections is constructed satisfying the quasi-static condition. Then an algorithm is developed to use the constructed matrices for PD propagation and location studies by application of the multi-conductor transmission line equivalent model. The results of the study are presented for a 66 kV/25 MVA transformer with fully interleaved winding.