The invention discloses a rack transformer for a 10kV distribution network overhead line and an installation method thereof. The rack transformer comprises a transformer, a first telegraph pole and asecond telegraph pole, the telegraph pole I and the telegraph pole II are connected through two first cross arm up and down; a transformer and a distribution box are respectively arranged on the firstcross arms; a second cross arm, a third cross arm and a fourth cross arm are arranged on the upper portion of the first telegraph pole, a fifth cross arm and a sixth cross arm are arranged on the upper portion of the second telegraph pole, the second cross arm, the third cross arm, the fourth cross arm, the fifth cross arm and the sixth cross arm are parallel to one another and are perpendicularto the first cross arms, a high-voltage inlet wire is connected to the second cross arm, a fuse is arranged on the third cross arm, and a lightning arrester is arranged on the fourth cross arm. The cross arm for installing the transformer and the cross arm for installing the high-voltage incoming line are arranged vertically, when the transformer is overhauled, no cross arm obstruction exists above the transformer, hoisting is convenient, the high-voltage inlet wire is arranged on one side of the uppermost portion of the telegraph pole, the low-voltage outlet wire is arranged on the other sideof the lower portion of the telegraph pole, the risk that personnel get an electric shock in the overhauling process of main and auxiliary pole low-voltage lines is effectively reduced, and a good effect is achieved.