Daubechies wavelets are a powerful systematic basis set for electronic structure calculations because they are orthogonal and localized both in real and Fourier space. We describe in detail how this basis set can be used to obtain a highly efficient and accurate method for density functional electronic structure calculations. An implementation of this method is available in the ABINIT free software package. This code shows high systematic convergence properties, very good performances, and an excellent efficiency for parallel calculations.