This paper proposes a method of harmonics detection and theoretical basis for the measurement of reactive and distortion powers using wavelet multi-resolution technique. The proposed method decomposes the voltage/current waveforms into the uniform frequency bands corresponding to the odd-harmonic components of the signal and uses a method to reduce the spectral leakage due to the imperfect frequency response of the used wavelet filter bank. The harmonic analysis has been performed on typical distribution system and compares the performance of the proposed method with the results obtained using the discrete Fourier transform (DFT) analysis. The measurement of real power relies on the use of broad-band phase-shift networks to create concurrent in-phase currents and quadrature voltages. The advantage of viewing the real and reactive powers in the wavelet domain is that the domain preserves both the frequency and time relationship of these powers. The harmonic analysis and real power measurement in a typical distribution system using wavelet multi-resolution technique is verified in MATLAB/SIMULINK environment.