A time-varying transformer outage model for operational risk assessment is proposed. Firstly， the state of a transformer is classified into three states: operation state， failure state caused by external accessory fault and failure state caused by internal latent fault. These three states can closely represent the operating mechanism in the developing process of transformer's outages. A time-varying outage model based on delayed semi-Markov process is proposed subsequently. This model can accommodate the difference in repairing time between the two failure states， as well as the impact of maintenance on the internal latent failure rate. Finally， a numerical example is provided to verify the proposed model.