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The leakage detection system based on negative pressure wave method has been widely applied to crude oil pipelines. Aiming at its shortcomings in reducing false alarms and improving location precision, a combined Kalman filter - discrete wavelet transform method for the leakage detection of crude oil pipelines has been proposed. In view of the nonstationarity of collected signals and excessive field noise, the Kalman filter (KF) is used for the pre-processing of pressure and flow signals at first, and then the leakage judgment and location of crude oil pipelines are carried out based on the filtered signals. The leakage location is obtained by extracting inflection points of the filtered pressure signal with the method of discrete wavelet transform (DWT). The field experiment results indicate that the method presented in this paper can reduce false alarm rate effectively and improve detection sensitivity and location precision.