The integration of the Global Positioning System (DGPS) with an Inertial Navigation System (INS) has been implemented for several years. In an integrated INS/DGPS system, the DGPS provides positions while the INS provides attitudes. In case of DGPS outages (signal blockages), the INS is used for positioning until the DGPS signals are available again. One of the major issues that limit the INS accuracy, as a stand-alone navigation system, is the level of sensor noise. The problem with inertial data is that the required signal is buried into a large window of high frequency noise. If such noise component could be removed, the overall inertial navigation accuracy is expected to improve considerably. The INS sensor outputs contain actual vehicle motion and sensor noise. Therefore, the resulting position errors are proportional to the existing sensor noise and vehicle vibrations. In this paper, wavelet techniques are applied for de-noising the inertial measurements to minimize the undesirable effects of sensor noise and other disturbances. To test the efficiency of inertial data de-noising, two road vehicle INS/DGPS data sets are utilized. Compared to the obtained position errors using the original inertial measurements, the results showed that the positioning performance using de-noised data improves by 34%–63%.