A method is described for filtering magnetotelluric (MT) data in the wavelet domain that requires a minimum of human intervention and leaves good data sections unchanged. Good data sections are preserved because data in the wavelet domain is analyzed through hierarchies, or scale levels, allowing separation of noise from signals. This is done without any assumption on the data distribution on the MT transfer function. Noisy portions of the data are discarded through thresholding wavelet coefficients. The procedure can recognize and filter out point defects that appear as a fraction of unusual observations of impulsive nature either in time domain or frequency domain. Two examples of real MT data are presented, with noise caused by both meteorological activity and power-line contribution. In the examples given in this paper, noise is better seen in time and frequency domains, respectively. Point defects are filtered out to eliminate their deleterious influence on the MT transfer function estimates. After the filtering stage, data is processed in the frequency domain, using a robust algorithm to yield two sets of reliable MT transfer functions.