diff --git a/doc/source/whatsnew/v1.1.0.rst b/doc/source/whatsnew/v1.1.0.rst
index c8e811ce82b1f..ad58232c81b23 100644
--- a/doc/source/whatsnew/v1.1.0.rst
+++ b/doc/source/whatsnew/v1.1.0.rst
@@ -169,6 +169,7 @@ Groupby/resample/rolling
 ^^^^^^^^^^^^^^^^^^^^^^^^
 
 - Bug in :meth:`GroupBy.apply` raises ``ValueError`` when the ``by`` axis is not sorted and has duplicates and the applied ``func`` does not mutate passed in objects (:issue:`30667`)
+- Bug in :meth:`DataFrameGroupby.transform` produces incorrect result with transformation functions (:issue:`30918`)
 
 Reshaping
 ^^^^^^^^^
diff --git a/pandas/core/groupby/generic.py b/pandas/core/groupby/generic.py
index 98cdcd0f2b6ee..27dd6e953c219 100644
--- a/pandas/core/groupby/generic.py
+++ b/pandas/core/groupby/generic.py
@@ -1416,22 +1416,20 @@ def transform(self, func, *args, **kwargs):
             # cythonized transformation or canned "reduction+broadcast"
             return getattr(self, func)(*args, **kwargs)
 
-        # If func is a reduction, we need to broadcast the
-        # result to the whole group. Compute func result
-        # and deal with possible broadcasting below.
-        result = getattr(self, func)(*args, **kwargs)
-
-        # a reduction transform
-        if not isinstance(result, DataFrame):
-            return self._transform_general(func, *args, **kwargs)
-
-        obj = self._obj_with_exclusions
-
-        # nuisance columns
-        if not result.columns.equals(obj.columns):
-            return self._transform_general(func, *args, **kwargs)
-
-        return self._transform_fast(result, func)
+        # GH 30918
+        # Use _transform_fast only when we know func is an aggregation
+        if func in base.reduction_kernels:
+            # If func is a reduction, we need to broadcast the
+            # result to the whole group. Compute func result
+            # and deal with possible broadcasting below.
+            result = getattr(self, func)(*args, **kwargs)
+
+            if isinstance(result, DataFrame) and result.columns.equals(
+                self._obj_with_exclusions.columns
+            ):
+                return self._transform_fast(result, func)
+
+        return self._transform_general(func, *args, **kwargs)
 
     def _transform_fast(self, result: DataFrame, func_nm: str) -> DataFrame:
         """
diff --git a/pandas/tests/groupby/test_transform.py b/pandas/tests/groupby/test_transform.py
index 6c05c4038a829..8967ef06f50fb 100644
--- a/pandas/tests/groupby/test_transform.py
+++ b/pandas/tests/groupby/test_transform.py
@@ -317,6 +317,32 @@ def test_dispatch_transform(tsframe):
     tm.assert_frame_equal(filled, expected)
 
 
+def test_transform_transformation_func(transformation_func):
+    # GH 30918
+    df = DataFrame(
+        {
+            "A": ["foo", "foo", "foo", "foo", "bar", "bar", "baz"],
+            "B": [1, 2, np.nan, 3, 3, np.nan, 4],
+        }
+    )
+
+    if transformation_func in ["pad", "backfill", "tshift", "corrwith", "cumcount"]:
+        # These transformation functions are not yet covered in this test
+        pytest.xfail("See GH 31269 and GH 31270")
+    elif transformation_func == "fillna":
+        test_op = lambda x: x.transform("fillna", value=0)
+        mock_op = lambda x: x.fillna(value=0)
+    else:
+        test_op = lambda x: x.transform(transformation_func)
+        mock_op = lambda x: getattr(x, transformation_func)()
+
+    result = test_op(df.groupby("A"))
+    groups = [df[["B"]].iloc[:4], df[["B"]].iloc[4:6], df[["B"]].iloc[6:]]
+    expected = concat([mock_op(g) for g in groups])
+
+    tm.assert_frame_equal(result, expected)
+
+
 def test_transform_select_columns(df):
     f = lambda x: x.mean()
     result = df.groupby("A")[["C", "D"]].transform(f)