Traditional single-phase power wiring consists of a hot wire, a neutral wire, and a ground wire. When multiple, physically separated devices share a common power line, it is possible to create ground loops due to devices having different ground potentials. These ground loops are especially problematic in medical devices and can be troublesome during device test. For designers, it is difficult to measure ground loops with devices that use rectified line voltages. Grounded test equipment, like oscilloscopes, can inadvertently short power supplies in these devices. Also, high frequency noise can ride on AC power lines causing problems for sensitive transducers and instruments.

Isolation transformers provide separation from the power line ground connection to eliminate ground loops and inadvertent test equipment grounding. They also suppress high frequency noise riding on the power source.