Wavelet transformation has become a cutting edge and promising approach in the field of image and signal processing. A wavelet is a waveform of effectively limited duration that has an average value of zero. Wavelet analysis is done by breaking up the signal into shifted and scaled versions of the original signal. The key advantage of a wavelet is that it is capable of revealing smaller changes, trends, and breakdown points that are not revealed by other techniques such as Fourier analysis. The phenomenon of polarization has been studied for quite some time and is a very useful tool for target detection and tracking. Long Wave Infrared (LWIR) polarization is beneficial for detecting camouflaged objects and is a useful approach when identifying and distinguishing manmade objects from natural clutter. In addition, the Stokes Polarization Parameters, which are calculated from 0°, 45°, 90°, 135° right circular, and left circular intensity measurements, provide spatial orientations of target features and suppress natural features. In this paper, we propose a wavelet-based polarimetry analysis (WPA) method to analyze Long Wave Infrared Polarimetry Imagery to discriminate targets such as dismounts and vehicles from background clutter. These parameters can be used for image thresholding and segmentation. Experimental results show the wavelet-based polarimetry analysis is efficient and can be used in a wide range of applications such as change detection, shape extraction, target recognition, and feature-aided tracking.