Abstract: This paper,the wavelet transform theory is introduced,the criterions of choosing basic wavelet function and the algorithm of wavelet transform are discussed,and the ways and characteristics of wavelet transform combining with artificial intelligence and other methods are analyzed.The application examples of wavelet transform in the fields of signal instantaneous analysis,image edge detection,image denoising,pattern recognition,data compression and fractal signal analysis are reviewed.The advantage of processing unstable signals and complicated images by wavelet transform is discussed.At the end,the development and future trends of wavelet transform are pointed out.