With the development of distribution transformers, the new distribution transformers represented by vegetable insulating oil distribution transformers and high overload distribution transformers, have been applied to distribution networks. Compared with normal distribution transformers, the new distribution transformers have obvious advantages in technical performance, which influence the selections of distribution transformers. In this paper, by analyzing the technical and economic characteristics of vegetable insulating oil distribution transformers and high overload distribution transformers, a life cycle cost model and a optimization method are proposed, which can be used to compare the economic benefits of different distribution transformers, and obtain the optimal selections according to the load level during planning period and the least principle of the life cycle cost. Finally, based on the load data of 10 kV feeders, the schemes of distribution transformers under four typical load curves are optimized by this method. The results show that the method proposed in this paper has strong feasibility and can guide the reasonable selections of distribution transformers.