A new analysis method based on wavelet domain for linear time-varying systems is developed and introduced and it is called system analysis in wavelet domain (SAIWD). Linear time-varying systems described by a higher order differential equation or state-space representation are analyzed in wavelet domain. To solve system equations, they are transferred to wavelet domain by forming algebraic matrix–vector relations using the wavelet transform coefficients. These relations are achieved by defining operator matrices concerned with the commonly used time domain operators. Orthogonal and compact support wavelets provide a simple way to define these operator matrices. It is seen from the solved examples that the percentage error between the analytical and wavelet domain solutions is around 1% in total sampling points.