An encapsulated transformer includes a transformer coil assembly, a rigid core insert having an upstanding portion positioned within the hollow interior of the core and a base portion on which the core rests, and a thermoplastic rubber jacket that completely surrounds the transformer coil assembly and is bonded to the base portion of the core insert to provide a completely waterproof encapsulated transformer which is impervious to liquid and gasses that could be detrimental to the performance of the transformer. A method for producing such an encapsulated transformer includes placing a rigid core insert in a mold cavity of a mold, and positioning a transformer coil assembly in the mold cavity so that the transformer coil assembly rests on the core insert. Thermoplastic rubber is then injected into the mold cavity to completely encapsulate the transformer coil assembly in a jacket of thermoplastic rubber. During the injection step, gas in the mold cavity is vented through a vent space provided in the bottom surface of the mold cavity. A mold for encapsulating a transformer coil assembly in thermoplastic rubber includes a bottom mold portion having a mold cavity, an upstanding pin disposed within the mold cavity, a mold cover for closing the mold cavity, and a vent space positioned in the bottom surface of the mold cavity for venting gas within the mold cavity to the exterior of the mold during the injection of thermoplastic rubber into the mold cavity.