Power line signal are normally subjected to disturbance and noise which degrade the overall performance of power quality monitoring system. This paper proposes a modified approach for denoising by combining an algorithm known as Stein's Unbiased Risk Estimator (SURE) algorithm incorporated with phaselet transform (PT). This algorithm is chosen particularly, as it not only performs denoising but also tends to optimally smooth the noisy signal. Since ' the algorithm is incorporated with phaselet, this leads to increase the coefficients obtained. Hence this method is found to be effective for application for denoising of power line signals. The different types of power quality signals simulated using the proposed method is found to be efficient and provide better results with increased Signal-to-Noise ratio (SNR) when compared with the results obtained by applying wavelet transform (WT). © 2006 JD.