As the mark of sonic source category, acoustic signal also carries some architecture and running status information of transformer to be a natural character. In fault diagnosis techniques, acoustic recognition as one of the important methods was used in mechanical equipments fault diagnosis and observation system. In transformer fault diagnosis, its acoustic signal time-frequency changing has close connection with the active state. A new method of transformer fault diagnosis based on Hilbert transform and wavelet contour is developed. The fault signals and normal signals that have near and far sound field noise are extracted, and then de-noise it. Using the Hilbert transform and wavelet contour processing the measured signal, Hilbert spectrum and wavelet contour, which attribute the time-frequency changing of transformer acoustic signal, is obtained. The test result shows the character of transformer running state. It is demonstrated by actual analysis that the new detection method is one effective way for the condition evaluation and fault diagnosis of transformer.