This paper introduces a novel speckle reduction method based on thresholding the wavelet coefficients of the logarithmically transformed image. The method is computational efficient and can sinificantly reduce the speckle while preserving the resolution of the original image. Both soft and hard thresholding schemes are studied and the results are compared. When fully polarimetric SAR images are available, we proposed several approaches to combine the data from different polorizations to achieve even better performance. Wavelet processed imagery is shown to provide better detection performance for synthetic-aperture radar (SAR) based automatic target detection/recognition (ATD/R)problem.