Abstract: Data denoising is a foundation work for extracting traffic information from floating car data. Wavelet analysis method shows excellent advantages in data denoising of doping noise signals. In this paper, a wavelet threshold denoising algorithm was proposed to suit data denoising of the original floating car data. According to noise-signal ratio and mean square deviation, the data denoising effect of floating car data was analyzed based on the constructed new threshold value and threshold function to determine the wavelet basis function as well as decomposition level of wavelet,so as to develop an effective algorithm for the wavelet threshold denoising of the floating car data. Results show that, the constructed wavelet threshold algorithm can improve the correlation of denoised floating car data to RTMS data by more than 10%. It means the floating car data can be effectively denoised.