Wavelet analysis as amathematic method can be used to solve some problems in sequence stratigraphy research. This paper analyzed the concept of this method from a geological standpoint and come to a conclusion that the logs are reflections of certain characteristics of strata that reveal the superposition of the sedimentary cycles in different periods，while these sedimentary cycles can be identified through wavelet analysis and used for division of sequence stratigraphic units. In practice，we realize that choosing the right wavelets are essential to the division of sequence units. We applied the technique to the analysis of different intervals of two wells in Dongying Sag of BohaiBay and found out that the method is not only useful in division of conventional interbedded sandstone and shale stratum，but also capable of identifying subtle changes that tend to be ignored with con-ventional methods. Combined with Fischer Diagram，we can use the techniques to identify the sequence units in a large interval with mono lithology.