The concept of two-direction refinable functions and two-direction wavelets is introduced.We investigate the existence of distributional(or L2-stable) solutions of the two-direction refinement equation: φ(x)=∑p+kφ(mx-k)+∑p-kφ(k-mx) where m ≥ 2 is an integer. Based on the positive mask {pk+} and negative mask {p-k}, the conditions that guarantee the above equation has compactly distributional solutions or L2-stable solutions are established. Furthermore, the condition that the L2-stable solution of the above equation can generate a two-direction MRA is given. The support interval of φ(x) is discussed amply. The definition of orthogonal two-direction refinable function and orthogonal two-direction wavelets is presented, and the orthogonality criteria for two-direction refinable functions are established. An algorithm for constructing orthogonal two-direction refinable functions and their two-direction wavelets is presented. Another construction algorithm for two-direction L2-refinable functions, which have nonnegative symbol masks and possess high approximation order and regularity, is presented. Finally, two construction examples are given.