This paper presents a wavelet and neural network based technology for the monitoring and classification of various types of power quality (PQ) disturbances. Simultaneous and automatic detection and classification of PQ transients, is recommended, however these processes have not been thoroughly investigated so far. In this paper, the hardware and software of a power quality data acquisition system (PQDAS) is described. In this system, an auto-classifying system combines the properties of the wavelet transform with the advantages of a neural network. Additionally, to improve recognition rate, extraction technology is considered.