The back propagation (BP)-based artificial neural nets (ANN) can identify complicated relationships among dissolved gas contents in transformer oil and corresponding fault types, using the highly nonlinear mapping nature of the neural nets. An efficient BP-ALM (BP with Adaptive Learning Rate and Momentum coefficient) algorithm is proposed to reduce the training time and avoid being trapped into local minima, where the learning rate and the momentum coefficient are altered at iterations. We developed a system of transformer fault diagnosis based on Dissolved Gases Analysis (DGA) with a BP-ALM algorithm. Training patterns were selected from the results of a Refined Three-Ratio method (RTR). Test results show that the system has a better ability of quick learning and global convergence than other methods and a superior performance in fault diagnosis compared to convectional BP-based neural networks and RTR. The back propagation (BP) -based artificial neural nets (ANN) can identify complicated relationships among dissolved gas contents in transformer oil and corresponding fault types, using the highly nonlinear mapping nature of the neural nets. An efficient BP-ALM Learning Rate and Momentum coefficient) algorithm is proposed to reduce the training time and avoid being trapped into local minima, where the learning rate and the momentum coefficient are altered at iterations. We developed a system of transformer fault diagnosis based on Dissolved Gases Analysis (DGA ) with a BP-ALM algorithm. Training patterns were selected from the results of a Refined Three-Ratio method (RTR). Test results show that the system has a better ability of quick learning and global convergence than other methods and a superior performance in fault diagnosis compared to convectional BP-based neural networks and RTR.