We propose analysis and algorithm implementation for a novel harmonic wavelet joint transform correlator (HWJTC) for image noise reduction and automatic target recognition (ATR) applications. We investigate useful properties of the HWJTC and apply our novel correlator in ATR for both noiseless and noisy synthetic aperture radar (SAR) images. Performance is demonstrated in reducing both simulated speckle noise and realistic clutter noise for SAR images. We also compare its performance with that of a well-established image denoising technique such as wavelet packet (WP) processing. The test images used in our simulation are obtained from a CAD simulation model such as Xpatch and Defense Advanced Research Projects Agency (DARPA) Moving and Stationary Target Recognition (MSTAR) program's synthetic aperture radar (SAR) image databases respectively. Simulation results show improved noise tolerance for HWJTC.