Power distribution transformer is one of the key asset to be managed by the utility. Ageing of transformers causes operational and financial burden on the utility. Excessive temperature is the primary cause of ageing of the transformer. Traditionally, utilities resort to load shedding in-order to save the transformer during high temperature periods. Instead, the concept of demand response can be used to maintain the transformer temperature at the same time considering the requirements of the load. In this paper we demonstrate how demand response can positively effect the life of the transformer. The practical load data from a section of IITH campus has been used, which is supplied by a single 500 KVA 11kV/440 V transformer. The results show the reduction in hottest spot temperature and reduction in loss of life of transformer. The simulation was carried out for a duration of 3 days, during which 3 demand response events occurred resulting in reduction in hottest spot temperature from 90 degrees to 80 degrees and reduction in loss of life of transformer from 35.3 hours to 19.8 hours. These results illustrate the benefit of demand response in improving the life of transformers without resorting to load shedding. © 2016 IEEE.