The inherent characteristic of ultrasonic and the application environment make ultrasonic image have some defects: image with speckle noise, edge blur and low contrast. In order to reduce the speckle noise and enhance the image characteristics, a speckle reduction and characteristic enhancement anisotropic diffusion algorithm is proposed based on the wavelet technology in this paper. The algorithm and parameters choice and algorithm realization steps had been analyzed and illuminated particularly. A compare research experiment for real ultrasonic image has been done using the algorithm and other traditional methods. The experimental result indicates that the proposed algorithm has strong speckle reduction and enhancement image ability. The purpose of removing speckle noise and enhancing image characteristics at same time has been reached.