Equalizers are widely used in digital communication systems for corrupted or time varying channels. To overcome performance decline for noisy and nonlinear channels, many kinds of neural network models have been used in nonlinear equalization. In this paper, we propose a new nonlinear channel equalization, which is structured by wavelet neural networks. The orthogonal least square algorithm is applied to update the weighting matrix of wavelet networks to form a more compact wavelet basis unit, thus obtaining good equalization performance. The experimental results show that performance of the proposed equalizer based on wavelet networks can significantly improve the neural modeling accuracy and outperform conventional neural network equalization in signal to noise ratio and channel non-linearity.