We know that transformers are made of electromagnetic materials like iron , ferrite cores etc. Now when this transformer is repeatedly magnetized and de-magnetized by an alternating current, the molecules or core materials inside it keep changing direction again and again. As a result of this change of direction some energy is released as heat which is of no use. This is called hysteresis loss. Note that this hysteresis loss is not only in the transformer. Hysteresis loss occurs wherever a coil is twisted on a magnetic object, starting from motors , generators , fans. However, generators and transformers try to control this hysteresis loss.