A speckle restraint algorithm was described for satellite SAR image using wavelet transform. The SAR image was decomposed using appropriate wavelet bases, and the contribution of speckle to wavelet coefficients was analyzed. Based on the multiplicative relation between speckle and gray and the correlation of speckle, a suitable threshold was selected. The SAR image speckle restraining was reconstructed using wavelet reconstruction technique. The experiment shows that speckle can be effectively restrained using this algorithm.