This paper proposes a wavelet-based data compression method to compress the recorded data of oscillations in power systems for wide-area measurement systems. Actual recorded oscillations and simulated oscillations are compressed and reconstructed by the waveletbased data compression method to select the best wavelet functions and decomposition scales according to the criterion of the minimum compression distortion composite index, for a balanced consideration of compression performance and reconstruction accuracy. Based on the selections, the relationship between the oscillation frequency and the corresponding optimal wavelet and scale is discussed, and a piecewise linear model of the base-2 logarithm of the frequency and the order of the wavelet is developed, in which different pieces represent different scales. As a result, the wavelet function and decomposition scale can be selected according to the oscillation frequency. Compared with the wavelet-based data compression method with a fixed wavelet scale for disturbance signals and the real-time data compression method based on exception compression and swing door trending for oscillations, the proposed method can provide high compression ratios and low distortion rates.