This paper presents a new digital differential protection for three phase (3φ) converter transformers. The proposed digital differential protection is developed to comply with the Standard ANSI 87 T, and is designed to detect and identify internal faults based on the energy contents of the high frequency subbands present in the d - q-axis components of the differential currents. Desired energy contents are quantified using the phaselet transform (PHT), which can process signals without sensitivity to the variations in their phase shifts. Energy contents of the high frequency sub-bands offer accurate, fast, and reliable detection and identification of internal faults in any part of a 3φ converter transformer. The d - q PHT-based digital differential protection is implemented for performance evaluation using different 3φ converter transformers, when feeding controlled rectifier units. Performance results demonstrate accurate, fast and reliable detection and response to different types of fault and non-fault events. Response features of the developed differential protection are complimented with simple implementation, reduced computations, and minor sensitivity to phase shifts.