Frequency Response Analysis (FRA) has been in use as a diagnostic method for transformers since the last decade and is emerging as a popular technique. However, accurate interpretation of FRA measurements is still under development. Recent studies reveal that apart from winding deformation, FRA data can also be influenced by moisture variation in transformer paper insulation. A better understating of this issue can in turn improve the frequency response interpretation Hence, a specific model transformer was fabricated for this study and the experiment was concentrated on the paper moisture variation and mechanical deformation influences on FRA spectrum deviation. Different physical changes to the test object are investigated and the results are recorded and discussed. These enable comparison of insulation characteristic and mechanical defect impacts on FRA data, and reveal factors influencing the FRA spectrum.