A high-voltage isolation withstand planar transformer and its high-voltage insulation method are provided. An insulating medium is provided between low-voltage windings and high-voltage windings. High-frequency current flows through the windings and generates a high-frequency alternating magnetic field to achieve isolated energy transmission. The low-voltage windings are connected to low-voltage side connection terminals, and the high-voltage windings are connected to high-voltage side connection terminals through a high-voltage winding leading-out foil. An annular hollow part of the low-voltage windings and the high-voltage windings is provided with a magnetic core. A stress grading method is provided to control the distribution of the electric field around the high-voltage winding leading-out foil. A voltage-balancing element group provides a voltage potential with a gradient change between the high-voltage winding leading-out foil and the low-voltage windings. The new transformer has small size, high power density and low cost.