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A new nonlinear noise reduction method is presented that uses the discrete wavelet transform. Similar to Donoho (1995) and Donohoe and Johnstone (1994, 1995), the authors employ thresholding in the wavelet transform domain but, following a suggestion by Coifman, they use an undecimated, shift-invariant, nonorthogonal wavelet transform instead of the usual orthogonal one. This new approach can be interpreted as a repeated application of the original Donoho and Johnstone method for different shifts. The main feature of the new algorithm is a significantly improved noise reduction compared to the original wavelet based approach. This holds for a large class of signals, both visually and in the l/sub 2/ sense, and is shown theoretically as well as by experimental results.