Nonlinear amplification is typically done on velocity signals from low-strain pile integrity tests to enhance weak echoes and superimpose any peak reflections. This conventional method may sometimes fail to untangle the hidden information within the signal that is obscured by the presence of noise. In this study, a pile defect identification system based on the conventional nonlinear amplification method and the wavelet packet transform (WPT) was proposed to easily detect the presence of any geometric or material defects by identifying feature parameters. Diagnostic rules, which have been lacking in the literature, were presented to serve as a guide in interpreting decomposed signals and in analyzing various characteristics of peak waveforms that are associated with certain types of defects. In this study, the finite element method was used to simulate the impact echo test of nine cases of defective piles. To verify the proposed scheme, six data sets of the nine cases of defective piles were made, in which a total of 54 piles were analyzed. The results of the study showed that the identification method based on WPT could detect defects 87.04% of the time compared to the conventional method, which only detected defects 64.81% of the time.