This document summarizes an algorithm for reducing speckle noise in images using a two-stage approach combining wavelet and spatial domain filtering. The first stage estimates the optimal parameter value for a spatial speckle reduction filter based on edge pixel statistics and noise variance. The second stage then uses the optimized spatial filter to additionally smooth wavelet approximation sub-band coefficients. A complexity reduction method for wavelet decomposition is also proposed. Existing noise reduction methods like the Lee, Kuan and Frost filters are reviewed for context. The results of applying the proposed two-stage algorithm are promising in terms of improved image quality.