Partial discharge (PD) measurement by using high frequency current transducer (HFCT) provides a means for online monitoring of power transformers. However, extensive interferences and noise can cause difficulties in PD signals interpretation and consequently lead to ambiguity in transformer insulation condition assessment. Therefore, necessary signal processing techniques need to be adopted for PD signals extraction. Wavelet transform is one of such techniques. However, wavelet transform has some limitations when applied to online PD measurement of power transformer. This paper proposes a differential PD signal extraction technique for online PD measurement on transformers. The performance of the proposed technique will be verified through case studies on data obtained from PD measurements on experimental PD models and in-service transformers.