For the problem of low positioning accuracy and low antinoise performance of traditional islanding detection methods, this paper proposes an islanding detection algorithm based on energy operator and improved maximal overlap discrete wavelet transform (MODWT). In order to effectively solve the boundary effect problem of MODWT algorithm, based on the traditional MODWT algorithm, the original wavelet coefficients are updated by the circular boundary coefficients. The energy is analyzed through the sliding window. Then the algorithm is applied to the island detection, and the detail coefficient and the approximate coefficient energy obtained by the processing are used to analyze the voltage disturbance signal characteristics of the common coupling point in the island state. The simulation results show that the algorithm can accurately detect the start time and amplitude variation of the voltage disturbance signal. And it is not affected by mother wavelet and decomposition layers and it has strong antinoise ability and small delay deviation in actual signal detection.