Abstract: To ensure the stability of electric power transmission between rotating spindle and non-rotating sleeve in steering drilling, a rotary separable transformer was designed according to the mechanical structure and space requirements of relevant steering tools.Iron alloy was chosen as the magnetic core material through theoretical analysis, and the clearance between primary winding and secondary winding was determined to be 1 mm and the optimum working frequency of the transformer to be 38 kHz, based on ANSYS simulation.Moreover, the primary series+secondary parallel compensation circuit was adopted, and its capacitance with the mutual inductance model of the transformer was calculated.Finally, the transmission efficiency of the transformer in laboratory under different input power was tested.The results showed that the optimum input power was about 150 W, under which both dynamic and static transmission efficiencies of the transformer were not less than 82%.When the input power was greater than 200 W and less than 300 W, the transmission efficiency was less than 80%.This suggested that the rotary transformer could be applied to the rotary steering drilling system, but it should be improved since its transmission efficiency was low (less than 80%) under high input power.