Abstract: An improved algorithm based on the second generation wavelet transform of lifting complex wavelet transform was proposed to detect and localize transient power quality disturbances.In the new algorithm,the Euclidean decomposition principle is used to obtain complex wavelet lifting scheme,a lifting and transform on some common disturbances are made with the scheme,and the amplitude and phase information after lifting complex wavelet transform are applied to localizing transient power quality disturbances and estimating amplitude.A comparision between the proposed algorithm and the first generation wavelet transform was made,and the simulation results show that the proposed algorithm is simpler,faster,and accurater,and it can localizing transient power quality disturbances and estimating amplitude precisely.