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This paper presents a very efficient algorithm for image denoising based on wavelets and multifractals for singularity detection. A challenge of image denoising is how to preserve the edges of an image when reducing noise. By modeling the intensity surface of a noisy image as statistically self-similar multifractal processes and taking advantage of the multiresolution analysis with wavelet transform to exploit the local statistical self-similarity at different scales, the pointwise singularity strength value characterizing the local singularity at each scale was calculated. By thresholding the singularity strength, wavelet coefficients at each scale were classified into two categories: the edge-related and regular wavelet coefficients and the irregular coefficients. The irregular coefficients were denoised using an approximate minimum mean-squared error (MMSE) estimation method, while the edge-related and regular wavelet coefficients were smoothed using the fuzzy weighted mean (FWM) filter aiming at preserving the edges and details when reducing noise. Furthermore, to make the FWM-based filtering more efficient for noise reduction at the lowest decomposition level, the MMSE-based filtering was performed as the first pass of denoising followed by performing the FWM-based filtering. Experimental results demonstrated that this algorithm could achieve both good visual quality and high PSNR for the denoised images.