A search for T-violating transverse muon polarization ($P_T$) in the $K^{+}to pi^{0}mu^{+} u$ decay was performed using kaon decays at rest. A new improved value, $P_T= -0.0017pm 0.0023 (stat)pm 0.0011 (syst)$, was obtained giving an upper limit, $| P_T | < 0.0050$. The T-violation parameter was determined to be Im$xi = -0.0053 pm 0.0071(stat)pm 0.0036(syst)$ giving an upper limit, $|$Im$xi| <0.016$.