In this research, an advanced signal processing technique using wavelet analysis has been developed for a guided wave structural health monitoring system. The approach was applied for the detection of delamination in carbon fibre reinforced composites. A monolithic piezoceramic actuator was attached to a laminate plate for wave generation while laser vibrometry was used to facilitate the measurements of the wave response in a sensor network. This database of wave response was then processed using the continuous wavelet transform to obtain the positional frequency content. Transforms between damaged and undamaged states were compared to ascertain the presence of defects by evaluating the total energy of the time-frequency density function. Results show high damage detection indices depending on the location of the sensor and normalisation factor applied while there are positive indications that this methodology can be extended for damage characterisation.