Partial discharge (PD) investigation is an essential subject in the area of condition monitoring of power transformers. Analysis of the response of PD signal occurring inside a transformer winding forms an integral part of the insulation diagnostic that requires to compute the voltages and currents at various nodes of the equivalent electrical network. In this context, a generalized state-space algorithm to compute the response of PD signal for an N-section mutually coupled ladder network of a transformer winding including losses is presented. Two distinct algorithms are demonstrated considering PD occurring at across and along the winding sections, respectively. The response of the PD signal is measured as the current response at the winding neutral terminal. To study the PD patterns in time and frequency domain, simulation results are obtained for a typical six-section ladder network of a transformer winding.