Core saturation of traditional current transformers can cause distortion of the secondary current waveform, which may affect the accuracy of energy metering or cause malfunction of relay protection equipment, posing a threat to the power grid. A novel current transformer based on composite core (CCCT) is proposed to address such issue. The CCCT is mainly composed of a composite iron core, secondary winding, secondary resistance, magnetic sensor, and signal processing circuit. The composite iron core includes a complete inner iron core and an outer iron core with air gaps. The magnetic sensor is placed in the air gap of the outer iron core, and its output is used to compensate for the distorted secondary current. To verify the validity of the structure, this paper builds a finite element simulation model, makes a prototype, and carries out the measurement experiment including sinusoidal AC, sinusoidal half-wave current, short-circuit current and direct current. Results of the finite element simulation and experiment show that the composite error of the CCCT at rated current is less than 0.2%, the composite error under symmetrical steady short-circuit current is 2.04%, the peak value of instantaneous error under transient short-circuit current is 4.25%, and the goodness of fit between output and input under DC conditions is 0.999 9, which can simultaneously meet the accuracy requirements of standards for measuring current transformers and protective current transformers. Consequently, the CCCT has the potential to be applied to practical projects since it has good transient response characteristics and anti-DC characteristics while maintaining the high measurement accuracy of traditional current transformers.