Due to the fact that near a crack singularity, gradients of the solution are large and are also subject to abrupt changes, so that the solution cannot locally be accurately approximated by a piecewise polynomial function on a quasi-uniform mesh. Lifting wavelet finite element has good ability in modal analysis for singularity problems like a cracked pipe. The first three natural frequencies of the cracked pipe were solved with lifting wavelet finite element, and the database for crack diagnosis was obtained. The first three measured natural frequencies were employed as inputs and the intersection of the three frequencies contour lines predicted the normalized crack location and size. The experimental examples denote the method is of higher identification precision.