A new three phase transformer model is presented in this paper, taking into account air gaps, saturation, core losses, and lamination anisotropy. The flux distribution in a straight overlap joint has been investigated using a lumped circuit model. It is shown that the actual air gap varies largely between an upper and a lower limit as a function of core saturation. Therefore, mitered joints have been modeled using a new concept of an equivalent variable air gap. This consists of defining the length of an equivalent air gap as a function of the instantaneous value of the flux in the laminations. A new approach to the core loss modeling is highlighted, It is characterized by a nonlinear conductance placed in parallel with the saturated magnetizing inductance. Furthermore, transformer yokes and limbs have been divided into longitudinal elements according to the rolling direction to take into account the lamination anisotropy effects. The transient and steady state behaviors of the transformer model have been tested. A good agreement is obtained between computed and measured results.