Optical wavelet decomposition was applied to the received amplitude-modulated signal transmitted through multi-span fiber links. Then the signal including nonlinear noise induced by the interaction of fiber nonlinearity and amplified spontaneous emission (ASE) noise was denoised in accordance with the theory of wavelet threshold denoise by means of optical filters. The procession mentioned above was simulated in three different fiber links and the signals after wavelet denoising and band-pass filter denoising respectively were compared in a common dispersion compensation system. The validity and feasibility of optical wavelet denoising was proved by the simulation results. It provides a novel solution to improve the quality and capacity of all-optic fiber communication systems.