Traffic Matrix (TM) can contain information about irregular network topology structure and depict the traffic characteristics of global network. It is a critical parameter to network traffic engineering and attracts significant research interests. Diffusion Wavelet (DW) can perform an effective Multi-Resolution Analysis (MRA)on TM in both temporaland space domains because it intrinsically adapts to the underlying network structure. This paper shows how to apply DW to TM analysis and anomaly detection. By comparing with other anomaly detection methods, it is confirmed thatour method can detect anomaly effectively due to combining with the analysis results by DW.