This paper presents and evaluates a wavelet-based statistical analysis of PET images for the detection of brain activation areas. Brain regions showing significant activations were obtained by performing Student's t tests in the wavelet domain, reconstructing the final image from only those wavelet coefficients that passed the statistical test at a given significance level, and discarding artifacts introduced during the reconstruction process. Using Receiver Operating Characteristic (ROC) curves, we have compared this statistical analysis in the wavelet domain to the conventional image-domain Statistical Parametric Mapping (SPM) method. For obtaining an accurate assessment of sensitivity and specificity, we have simulated realistic single subject [¹⁵O]-H₂O PET studies with different hyperactivation levels of the thalamic region. The results obtained from an ROC analysis show that the wavelet approach outperforms conventional SPM in identifying brain activation patterns. Using the wavelet method, activation areas detected were closer in size and shape to the region actually activated in the reference image.