Abstarct: In this study, wavelet analysis has been used for up sacling of a 3D hypothetical fine grid reservoir model. To generate the initial model, some set of fractures have been added numerically to a relatively homogenus simulated matrix. The permeability and porosity of reservoir are the most important factors controlling the distribution and movement of fluid inside of reservoir. Therefore, these parameters have been chosed for up scaling of reservoir model grids. The property of multiresolution of wavelet functions was the basis of upscaling the initial fine grid model in a non-uniform way, which means upscaling takes place intelligently to keep the maximum of the initial model details. The synthethised 3D initial model has been imported to eclips software to generate a dynamic model of the reservoior behaviour. This model was upscaled by using several wavelet functions. A comparison among them has leed to select the best mother-wavelet function. This research shows the close result of dynamic parameters drawn from the upscaled model and the fine initial model. In addition, the consumed time to simulate the dynamic behavior of upscaled models has been imporoved considerably.