Ultrasonic echoes, which contain useful information related to material micro-damages in nondestructive evaluation, usually exhibit involved time-varying frequency properties. In this paper, continuous wavelet transform (CWT) based time-frequency analysis for echo signal were discussed. Ultrasonic testing of pulse-echo technique with high frequency contact transducers was carried out to thermally degraded Cr-Mo steel samples processed by different high temperature heat treatment conditions. Obtained echo signals were analyzed by CWT based on Gabor wavelet. Two major frequency dependent ultrasonic parameters, attenuation and velocity, were obtained from the local peak values at each frequency from the magnitude of CWT. Further, numerical correlations of the attenuation coefficients and group velocity with the sample's internal grain size were obtained. This method has a potential for quantitative evaluation to damage advance before crack initiation