A material nondestructive discrimination method based on thermoelectric effect is proposed to discriminate transformer winding materials in engineering practice. This paper first theoretical analyzes the relationship between winding materials and thermoelectric potentials produced in winding circuit. Then an entity simulation model of distribution transformer winding is established, and thermoelectric field simulation analyses are carried out. At last the theoretical analysis and simulation results are testified by experiments. Research results prove the copper and aluminum windings can be discriminated obviously by this method.