In order to study the time-varying nonlinear mechanical behavior of isolated structures under earthquake action, a novel method of identifying time-varying nonlinear parameters of isolated structures is proposed based on wavelet multi-resolution analysis (WMRA) theory. The classic hysteresis nonlinear Bouc-wen model used to describe isolation bearings is studied.In the motion equation established, the three-order effective numerical difference technique is cited to linearize increment expression of restoring force in nonlinear model and form a recursive observation equation. The time-varying parameters to be identified in observation equation are expressed approximately using WMRA, and their identification can be transformed into time-invariant wavelet reconstruction coefficient estimation in multivariable linear regression model. Numerical simulation and shaking table test data of serial seismic isolation system (SIS) are employed to identify evolution law with time of structural parameters and isolation layer parameters, and correctness and applicability of the method are verified. It can be used to evaluate mechanical states of the isolated structures during both construction period and operation period.