The paper will discuss the use of wavelet algorithms in the processing of x-ray imagery. X-ray imaging technology is currently being employed by various government agencies to detect the presence of undesirable contraband in shipping vessels and containers. The DoD Counter Drug Technology Development Office has sponsored the development of several of these systems. This paper will describe the capability of these algorithms to aid an operator by providing images that have ben corrected to provide the proper dynamic range in local areas. This capability will enable the presentation of images with significant dynamic range, where the useful information is presented adjusted to the local objects. We will also show the application of wavelet algorithms to the detection of contraband objects. These detection level algorithms are low level algorithms designed to develop candidate objects for processing by higher level algorithms. These higher level algorithms can then be used to aid operators in the screening of baggage and shipping vessels for contraband.