In a hybrid AC-DC transmission grid， DC bias and commutation failure have adverse effects on the behavior of transformer differential protection. With the model of an actual hybrid AC-DC transmission grid in northwest of China， the performance of differential protection under these two situations are discussed. Simulation results show that the second order harmonic produced by DC bias may cause miss-operation of differential protection in the event of minor internal faults. The results also reveal that under the circumstances of commutation failure， where the current of the AC system can be seen as a harmonic source， the differential protection may refuse operation when internal faults happen because of the high second order harmonic. The protection scheme based on fault component integrated impedance is used to solve these problems. Theoretical analysis and simulation results show that the scheme is with high sensitivity and reliability even when minor internal faults happen under the situation of DC bias or commutation failure.