Abstract: With the analysis of locomotive wheels rims ultrasonic testing signals, the deeply integrated project of digital filter and digital demodulation is presented. By comparing advantages and disadvantages of finite impulse response and wavelet transform, the later one will be adopted to denoise and then the envelopes by the denoised signals will be extracted based on cubic spline interpolation. The signal processing method based on these combinatorial algorithms is designed. Simulation results illustrate that the method in this paper has the qualities of high distinguishing capability, good ability of anti-interference and low loss in echo signal. So it can effectively solve the problem of low signal-to-noise ratio and difficulty in echo recognition.