In optical time domain reflectometer(OTDR) test, the system link noise seriously affects the test accuracy, especially for the accurate detection of 0.05-0.2 dB fusion loss, it is necessary to improve the signal-to-noise ratio of the test curve. According to the characteristics of OTDR waveform, based on wavelet threshold denoising, an improved wavelet denoising method is proposed . The improved threshold makes use of the nonlinearity of logarithmic function and introduces noise variance, which is more conducive to filtering out noise; the improved threshold judgment function leaves original data details and filters out noise, and does not change the waveform attributes of reflection events and non-reflection events. The actual test results show that the relative signal-to-noise ratio of the test curve is increased by more than 10 dB, and the fusion event can be accurately detected after denoising with curve smoothing filter and constant false alarm rate(CFAR) detection.