Aiming at improving the unideal testing result by means of analog signal processing, wavelet analysis is introduced in the nondestructive testing of steel and iron materials, based on the characteristics of electromagnetic nondestructive testing signal. According to the requirement of wavelet algorithm for hardware, the advantages of DSP, digital signal processing function and high calculating speed, design scheme of the steel electromagnetic nondestructive testing device is proposed in this paper. Experiments show that this method can extract detection signal effectively.