Photoacoustic image reconstruction may involve hundreds of point measurements, each of which contributes unique information about the subsurface absorbing structures under study. For backprojection imaging, two or more point measurements of photoacoustic waves induced by irradiating a biological sample with laser light are used to produce an image of the acoustic source. Each of these measurements must undergo some signal processing, such as denoising or system deconvolution. In order to process the numerous signals, we have developed an automated wavelet algorithm for denoising signals. We appeal to the discrete wavelet transform for denoising photoacoustic signals generated in a dilute melanoma cell suspension and in thermally coagulated blood. We used 5, 9, 45 and 270 melanoma cells in the laser beam path as test concentrations. For the burn phantom, we used coagulated blood in 1.6 mm silicon tube submerged in Intralipid. Although these two targets were chosen as typical applications for photoacoustic detection and imaging, they are of independent interest. The denoising employs level-independent universal thresholding. In order to accommodate nonradix-2 signals, we considered a maximal overlap discrete wavelet transform (MODWT). For the lower melanoma cell concentrations, as the signal-to-noise ratio approached 1, denoising allowed better peak finding. For coagulated blood, the signals were denoised to yield a clean photoacoustic resulting in an improvement of 22% in the reconstructed image. The entire signal processing technique was automated so that minimal user intervention was needed to reconstruct the images. Such an algorithm may be used for image reconstruction and signal extraction for applications such as burn depth imaging, depth profiling of vascular lesions in skin and the detection of single cancer cells in blood samples.