Substations are critical components in a power system. Performance of substations during past earthquakes has not been satisfactory and many key components such as transformers and bushings have sustained significant damage. Recently several research investigations have been conducted to better evaluate, assess, and qualify seismic performance of critical substation components with emphasis on transformers and bushings. These studies include both analytical and experimental research. This paper discusses the performance of substation transformers and development of an analytical model using finite element method. Due to weight limitation, shaking table tests of transformers are not feasible. Therefore, finite element analysis is the only suitable platform to assess their seismic performance and to evaluate their effect on the response of other important components such as bushings. Furthermore, the use of base-isolation, which appears to be a practical and economical rehabilitation approach, is discussed. In this research study application of friction pendulum system for base isolation of substation transformers has been investigated and some of the results are presented. Finally, a brief discussion of a series of experimental tests on a fixed and isolated transformer model supporting a bushing is also given.