This paper presents the main results of an investigation conducted with the aim of reducing to an acceptable level the lightning-caused distribution transformer failure rate in a region in the South of Brazil. The region, in the border of the State of Rio Grande do Sul and Argentina, is characterized by a high lightning activity. The analysis of failed transformers and field results shows that the installation of surge arresters at the transformer LV side does not drastically change the failure rate. Computer simulations corroborate this result and confirm that failures are mostly associated with surges coming from the MV side. Therefore, the recommendations are mainly related to the surge arrester installation procedures at the primary side. A discussion is provided on the reasons for the apparent discrepancy with regard to the conclusions of similar investigations carried out in Australia, Norway, and the USA, according to which the installation of secondary arresters leads to substantial reduction in transformer failure rates.