Abstract: Wavelet analysis has being gradually applied to communications, especially, wavelet modulation receives much considerations for its bandwidth efficiency. This paper discusses how to design optimal orthogonal wavelet and scaling functions which are generated by FIR filters, from the view point of bandwidth efficiency, the designing method and results are given in details. By comparison, the bandwidth efficiency of wavelet modulation has improved significantly for the same system complexity after optimization, so relatively good spectral performance using simple FIR filters can be obtained.