The paper is concerned with whether CT transient saturation, which caused by sympathetic inrush, is the direct reason for mal-operation of transformer differential relays. In order to analyze transforming characteristics of saturated CT, the gain of each harmonic current transforming from primary winding to secondary winding of transient saturation CT is calculated. Based on the fact that series sympathetic inrush is easier to lead differential relay mal-operation than parallel sympathetic inrush, the effect of CT saturation on differential relay in the case of both parallel sympathetic inrush and series sympathetic inrush are investigated respectively. Theory analysis and simulation show that higher harmonic will be transferred by saturated CT more easily than lower harmonic, and then the second harmonic proportion of CT secondary side is higher than that of CT primary side. Thus CT transient saturation itself is not essential reason for differential relay mal-operation. Parallel sympathetic inrush and series sympathetic inrush will lead to different location CT saturated. Parallel sympathetic inrush will lead to CT located system side saturated; second harmonic ratio of differential current increase and dead angle is large. Series sympathetic inrush will lead to CT located load side saturated; second harmonic ratio of differential current decrease and dead angle is small.