The basis of the true thermal rating of a transformer is the maximum temperature which the insulation will withstand without damage.In the design of a transformer to meet any specified loading conditions, calculation of the true thermal rating is necessary in order to make the most economic and efficient use of the material.Since the capacity of a transformer depends on external loading conditions, such as duration of load and temperature of cooling medium, predetermination of the thermal rating is also necessary for any combination of loading conditions that may occur in practice.Measurement of the true thermal rating while the transformer is in service is required partly as a check on the calculated rating, partly as a protection against overloading, and partly so that full and efficient use may be made of the available capacity of the transformer.The paper deals with these problems. In the first part a practical method of calculating the true thermal rating of a transformer under any given conditions of loading is developed.In the second part of the paper the measurement of the thermal rating is considered. An instrument is described which indicates, while the transformer is in service, the proportion of the maximum safe rating actually being utilized, and gives warning whenever the safe temperature limit is reached.