This paper presented a new propagation time estimation method based on ICA-domain filter. The technique consists of two steps. Firstly, denoising in ICA domain by sparse code shrinkage was applied to each received signal to recover the original waveform. In the process, a new shrinkage function was designed to make the filter more adaptive. Then, the propagation time was found by locating the peak of the cross-correlation function. The propagation time estimations under several conditions were simulated to evaluate the performance of the method. The experiment results show that the proposed method performs better than classic correlation methods, which makes it an efficient method in wood nondestructive evaluation.