Abstract: Based on the discussion of the wavelet construction method and the wavelet decomposition theory of multiresolution analysis, in combination with the features of strong instantaneity and quick attenuation of power fault transients, an optimum wavelet construction method based on maximizing the 2-norm of time domain of discrete wavelet decomposition approximation is studied. Computation indicates that this method applied in the compression of power system fault transient data will increase the compression ratio and decrease the reconstruction error.