Abstract: In this paper, an alternative AQM(Active Queue Management) is designed: WDSE (Wavelet-Decomposed Signal Energy) approach is capable of detecting and managing self-similar traffic. This approach uses wavelets and measures the energy of input traffic at the output of each dyadic subband filter. The scheme is based on the wavelet multiresolution analysis, which can be used to predict short and long term fluctuations in the incoming traffic pattern and readjust the marking drop probabilities without the difficulty of parameters selection in advance unlike RED. Comparing the WDSE and RED about the dynamic performance, improved transient performance of WDSE is illustrate. As evident from the simulation, the WDSE performs better, responding more quickly to load variations than the RED. Moreover, the WDSE is superior in robustly regulating the steady-state value of the queue level.