Power transformer failures can lead to power outages and significant financial loss, particularly at high voltage and medium voltage levels. Frequency response analysis (FRA) is used to diagnose transformer faults and particularly so for detecting mechanical displacements in windings and core. However, such displacements or faults affect significantly the electrical impedance of the transformer windings and challenges remain in the correlation of FRA signature and fault type. Furthermore, other factors such as the adopted measurement method and practical test setup influence the FRA signature. This paper investigates FRA responses of small laboratory test transformers measured using an IEEE standard recommended method and proposes a new generic test setup having additional current measurement points and using precision lock-in amplifiers. The results show the effect of change in the magnitude of applied voltage levels on FRA signatures.