This paper introduced the definition, structure of basis wavelet functions and wavelet lifting. Wavelet transform and wavelet lifting were applied in signal processing of EGG in our study. The characteristics of signal energy, information entropy and joint entropy were analyzed to introduce general selective method of wavelet basis functions after the signals have been filtered. In order to verify the rationality of evaluation criteria, signals of electrogastrogram (EGG) were processed and filtered with different wavelet basis functions in the experiments. Signals of EGG were filtered by wavelet transform and wavelet lifting, slow wave and spike wave of EGG were filtered. And the rationality of wavelet transform, wavelet lifting and effectiveness of EGG filter algorithm were proved by the experimental data. It provided an effective solution for the diagnosis and measurement of gastric diseases.