When a current transformer (CT) is saturated, the wave-shape of the secondary current is distorted and contains points of inflection, which correspond to the start or end of each saturation period. Discontinuity in the first-difference function of the current arises at points of inflection, where the second and third differences convert into pulses that can be used to detect saturation. This paper describes the design and evaluation of a CT saturation detection technique using the third-difference function and includes the countermeasure for a spike signal. Test results clearly demonstrate that the algorithm successfully detects the start and end of each saturation period irrespective of the remanent flux and magnetization inductance in the saturated region. This paper concludes by describing the results of hardware implementation of the algorithm using a DSP.