Presented in this paper is a distortion-free filtering approach for cancellation of sinusoidal harmonic interference using wavelet packet decomposition (WPD). Under a special sampling condition, the transform coefficients of the harmonic interference in each subband become a constant, exhibiting as a shift of the baseline of the WPD coefficients in that subband. The harmonic interference is thus removed by shifting the baselines back to zero. Unlike the use of a notch or a comb filter, the new approach does not cause any distortion to the original signal in principle. This advantage makes this approach especially suitable for the removal of harmonic interference that is located within the spectrum of the original signal. Evaluation of the new approach has been conducted using a simulated piecewise smooth signal and a real, irregularly pulsating signal. Results obtained from the studies have demonstrated the effectiveness of the new approach.