In this paper, a novel capacity regulation method based on load sequence current is proposed to solve the problem of the poor economy of the original threshold value capacity regulation method when the on-load capacity regulating transformer is in three-phase imbalanced operation in low-voltage distribution network. According to the loss calculation model of the transformer under three-phase imbalance, the loss critical functions of different capacities of the on-load capacity regulating transformer are firstly established, and then, the economic operation capacity of the capacity regulating transformer is obtained through the relationship between the sequence current of the three-phase imbalance load and the critical function. Finally, through practical examples, the proposed method is compared with the threshold value capacity regulation method in terms of capacity adjustment results and power consumption, which verifies the accuracy and economy of the capacity regulation method proposed in this paper.