Automatic on-load voltage regulation of a transformer is an effective method to stabilize load voltage. A machine-contact, tap-changing switch is not adequate for a distributing transformer because of its high cost and low capability. This paper presents the structure and automatic on-load, voltage-regulating principle of a distributing transformer which employs a solid-state relay as a non-contact, automatic on-load voltage-regulating, tap-changing switch. The generation mechanism and limiting measure of circular current that occurs in the process of switching a tap joint. By theoretical analysis and experimental verification, it is concluded that this method creates a different process of circular current occurrence when voltage is regulated to a higher or lower value.