Winding deformation is a common problem that takes place within operating power transformers due to various internal and external conditions. Due to their progressive nature, winding deformations should be detected and rectified as soon as they emerge. Unfortunately, the only reliable technique to detect such faults at this stage is the frequency response analysis which is conducted offline. This has motivated researchers to propose alternative techniques to detect power transformer incipient winding and core deformations in real time. One of the promising online techniques proposed in the literature is the V-I Lissajous pattern method. While this technique was validated through simulation analysis, its feasibility for practical applications has not been explored yet. This paper takes a further step toward the field implementation of this technique through practical measurements on a custom-made transformer to assess its sensitivity, repeatability, and antinoise capability. Also, a new compensation approach is proposed to eliminate the effect of the transformer loading variation on the V-I Lissajous pattern. For the practical application of this technique, a hardware setup has been developed and installed to monitor the V-I characteristics of an operating power transformer within a 220-kV substation in real time.