Abstract: There are some shortcomings for the threshold compression algorithm based on traditional wavelet transform,such as complex,poor real-time,floating-point coefficients and so on.As such,this article proposes a threshold compression algorithm based on IWT that applies in the data compression of train wheels of ultrasonic flaw detection.The algorithm optimizes threshold function and the marking method of position of non-zero coefficients.By contrast with the compression effect of traditional threshold compression and algorithm based on traditional wavelet transform,it shows that the algorithm the article proposes can get higher compression ratio and reconstruction accuracy,which has good application prospects.