A method to accurately determine the relative phase between images acquired using phase-shifted moire´ interferometry is presented. Phase shifting, combined with the accurate determination of the relative phase shift, provides an improvement of the sensitivity of moire´ interferometry from 0.417 μm/fringe to 27.8 nm/fringe. Specifically, a 1-D continuous wavelet transform technique was developed to effectively reduce the transient environmentally induced noise and the static background noise that complicate phase determination. Using this technique, accurate relative phase shifts of the interferogram frames were determined with an error of As a result, very smooth and accurate phase-map reconstruction of the initially noisy interferogram was accomplished. © 2003 Society of Photo-Optical Instrumentation Engineers.