Power distribution transformers are key infrastructural elements whose operational failure introduces network instability, high repair liabilities, and customer power disruptions. Standard manual maintenance schemes cannot prevent rapid failures caused by overloading and unexpected thermal spikes in real time. This paper details the engineering and validation of an automated, Internet of Things (IoT)-driven health monitoring system designed for a 1 kVA single-phase air-cooled distribution transformer. Centered on an Arduino Uno microcontroller layer, the architecture integrates non-invasive electrical and ambient environment sensors to monitor terminal AC voltage, load current, ambient temperature, and humidity. Remote telemetry and geographical asset location are managed via embedded GSM (SIM800L) and GPS (NEO-6M) modules. Testing confirms that the system handles real-time parameter tracking and runs safety trip logic during electrical overcurrent and over-temperature violations.