Stereo vision is a methodology to obtain depth in a scene based on the stereo image pair. In this paper, we introduce a discrete wavelet transform (DWT)-based methodology for a state-of-the-art disparity estimation algorithm that resulted in significant performance improvement in terms of speed and computational complexity. In the initial stage of the proposed algorithm, we apply DWT to the input images, reducing the number of samples to be processed in subsequent stages by 50%, thereby decreasing computational complexity and improving processing speed. Subsequently, the architecture has been designed based on this proposed methodology and prototyped on a Xilinx Virtex-7 FPGA. The performance of the proposed methodology has been evaluated against four standard Middlebury Benchmark image pairs viz. Tsukuba, Venus, Teddy, and Cones. The proposed methodology results in the improvement of about 44.4% cycles per frame, 52% frames/s, and 61.5% and 59.6% LUT and register utilization, respectively, compared with state-of-the-art designs. © 2017 IEEE.