This article presents and tests the performance of a digital differential protection for three-phase (3 phi) converter transformers. The proposed digital differential protection is developed to comply with the ANSI 87T protection procedure. The presented protection is featured with fault detection based on the energy contents of the high-frequency subbands of the d-q axis components of differential currents. Desired energy contents are extracted using the phaselet transform (PHT), which can process signalswithout sensitivity to the variations in their phase shifts. Energy contents of the high-frequency subbands offer accurate, fast, and reliable detection, and identification of internal faults in any part of a 3 phi converter transformer. The d-q PHT-based digital differential protection is implemented for performance evaluation using different 3 phi converter transformers, when feeding controlled rectifier units. Performance results demonstrate accurate, fast, and reliable detection, and response to different types of fault, and nonfault events. Response features of the developed differential protection are complimented with simple implementation, reduced computations, and minor sensitivity to phase shifts, fault location, and loading levels.