This paper introduces a wavelet-based method to analyze instability events in a boiling water reactor (BWR) during transient phenomena. The methodology to analyze BWR signals includes the following: (a) the short-time Fourier transform (STFT) analysis, (b) decomposition using the continuous wavelet transform (CWT), and (c) application of multiresolution analysis (MRA) using discrete wavelet transform (DWT). STFT analysis permits the study, in time, of the spectral content of analyzed signals. The CWT provides information about ruptures, discontinuities, and fractal behavior. To detect these important features in the signal, a mother wavelet has to be chosen and applied at several scales to obtain optimum results. MRA allows fast implementation of the DWT. Features like important frequencies, discontinuities, and transients can be detected with analysis at different levels of detail coefficients. The STFT was used to provide a comparison between a classic method and the wavelet-based method. The damping ratio, which is an important stability parameter, was calculated as a function of time. The transient behavior can be detected by analyzing the maximum contained in detail coefficients at different levels in the signal decomposition. This method allows analysis of both stationary signals and highly nonstationary signals in the timescale plane. This methodology has been tested with the benchmark power instability event of Laguna Verde nuclear power plant (NPP) Unit 1, which is a BWR-5 NPP.