Ab initio calculations of the electronic structure of bulk materials and large clusters are not possible on today's computers using current techniques. The storage and diagonalization of the Hamiltonian matrix are the limiting factors in both memory and execution time. The scaling of both quantities with problem size can be reduced by using approximate diagonalization or direct minimization of the total energy with respect to the density matrix in conjunction with a localized basis. Wavelet basis members are much more localized than conventional bases such as Gaussians or numerical atomic orbitals. This localization leads to sparse matrices of the operators that arise in SCF multi-electron calculations. We have investigated the construction of the one-electron Hamiltonian, and also the effective one-electron Hamiltonians that appear in density-functional and Hartree-Fock theories. We develop efficient methods for the generation of the kinetic energy and potential matrices, the Hartree and exchange potentials, and the local exchange-correlation potential of the LDA. Test calculations are performed on one-electron problems with a variety of potentials in one and three dimensions.