Lionel transformers for O gauge model railroads require a complex set of connections for proper setup, posing a challenge for O gauge enthusiasts. Specifically, the KW transformer provided by Lionel can be very confusing, as it is capable of providing power to two separate track circuits, complicating setup. Despite the complexity, the KW transformer can be very useful in variety of situations if properly connected to the track, making it worthwhile for you to utilize its uniqe setup.
Attach track clips onto each of two separate track circuits (one clip per track). Slide the clip underneath the track rails, center the rails over the metal springs, and press down on the track firmly to snap it onto the clip.
String the wires from the clips back the the transformer, and strip 1/2 inch of insulation off the ends of each of the wires using the wire strippers. Use the gauge on the side of the strippers to locate the proper slot with which to strip the wires.
Loosen the screws on one side on the back of the transformer marked "A" and "U," using the screwdriver. Connect one set of wires to these screws, one wire to each screw, and secure them in place with the screwdriver. Repeat with the other set of wires to the screws on the other side of the transformer marked "B" and "U."
Connect the two wires from the accessory power distribution panel (if you have one) to the screws marked "C" and "D."
Plug in your transformer. Place one train on each of the two newly powered tracks. If the train running on the "U-A" track is going the wrong direction per your preference, unplug the transfomer and switch the wires on the "U-A" screws. Repeat this test on the "U-B" track.