Abstract: In view of problem that traditional OFDM algorithm based on discrete Fourier transform used in underground low-voltage power lines is prone to produce larger ISI and ICI to influence normal receiving of signal, an OFDM communication algorithm based on wavelet transform was proposed. The algorithm selects Daubechies wavelet function as orthogonal wavelet basis, uses MATTAL algorithm to decompose and reconstruct wavelet, and gets channel output functions. The simulation result shows that the OFDM algorithm based on wavelet transform can reduce ISI and ICI in application of low-voltage power line communication, and improve communication quality.