This paper presents the development and performance testing of a digital differential protection for solid-state transformers (SSTs). The presented digital differential protection is developed to comply with the Standard ANSI 87T, and has its differential currents created by dq0 components of the currents flowing in the high and low voltage sides of a SST. Internal faults are detected and identified based on energy contents of the high frequency sub-bands present in the dq0 differential currents. Desired high frequency sub-bands are extracted using the phaselet transform, which can process signals without sensitivity to variations in their frequency and/or phase shifts. Energy contents of extracted high frequency sub-bands allow accurate, fast, and reliable detection and identification of faults in any part of a SST. The developed digital differential protection is implemented for performance testing using a laboratory 25 kVA 3ϕ SST. Performance results demonstrate accurate, fast, and reliable response to different fault and non-fault events. Responses of the developed differential protection are found to be insensitive to the fault type, fault location, and loading level.