An audio transformer provides galvanic isolation and common-mode rejection to break ground loops
An audio signal transformer couples signal between primary and secondary windings via magnetic induction — there is no direct electrical connection (galvanic isolation). This breaks the DC and AC paths between circuit grounds, eliminating ground loops. Transformers also provide impedance transformation (turns-ratio squared determines impedance ratio) and can step signal levels up or down. Quality audio transformers maintain wide bandwidth (10 Hz–100+ kHz), low distortion at rated levels, and precise turns ratios. They are the only solution when high common-mode voltages or absolute ground isolation is required. Electronically balanced (differential) inputs reject common-mode noise but cannot handle very large common-mode voltages or completely separate ground returns the way a transformer can.
Examples
A splitter transformer on a stage send box isolates the ground between the monitor console (which stays connected to stage ground and phantom power) and the house console (which may be hundreds of feet away at FOH), preventing hum from the loop.
Assessment
When would you choose an isolation transformer over an electronically-balanced (differential) input to solve a hum problem? What capability does the transformer have that the differential amp lacks?