Some new theory and algorithms on wavelet analysis are proposed, including continuous wavelet transform (CWT), discrete wavelet transform (DWT), wavelet package transform (WPT), wavelet denosing and mother wavelet selection, etc. Using the component-based hierarchy mode, the platform for virtual instrument (VI) is constructed, and the functions such as data sampling, data analysis and data present, etc are provided. Subsequently, the wavelet analysis library is designed and developed. The library consists of expert system, experienced database, development platform and abundant wavelet analysis functional module, which together implement general and special wavelet analysis in the field of mechanical engineering, energy source, transportation and biomedicine, etc. Finally, the wavelet analysis virtual instrument library is applied to detect fault called engine knock. Experimental result indicates that the wavelet analysis virtual instrument library can efficiently solve the engineering problem such as detecting engine knock. Some new theories and algorithms on wavelet analysis are proposed, including continuous wavelet transform (CWT), discrete wavelet transform (DWT), wavelet package transform (WPT), wavelet denosing and mother wavelet selection, etc. Using the component- the platform for virtual instrument (VI) is constructed, and the functions such as data sampling, data analysis and data present, etc are provided. The library consists of expert system, experienced database, development platform and abundant wavelet analysis functional module, which together implement general and special wavelet analysis in the field of mechanical engineering, energy source, transportation and biomedicine, etc. Finally, the wavelet analysis virtual instrument library is applied to detect fault called engine knock. Experimental result indicates that the wavelet analysis virtual instrument library can solve solve the engineering problem such as detecting engine knock.