In this paper, wavelet transform technique is applied to detect fault in the transmission line with flexible alternating current transmission (FACTS) device. Presence of FACTS device changes the system impedance and hence makes it difficult to detect faults on the line which may result into maloperation of relay. Three phase currents are monitored at both ends of the transmission line using global positioning system synchronizing clock. Wavelet transforms, which is very fast and sensitive to high frequency signal is used to extract transients in these line currents for fault detection. Fault index is calculated based on the sum of local and remote end detail coefficients and compared with threshold value to detect the fault. Proposed technique is tested for various faults and fault inception angles with and without static synchronous compensator (STATCOM) device. Simulation results are presented showing the selection of proper threshold value for fault detection. © 2011 IEEE.