We present a novel integrated wavelet-domain based framework (w-ICA) for 3-D de-noising functional magnetic resonance imaging (fMRI) data followed by source separation analysis using independent component analysis (ICA) in the wavelet domain. We propose the idea of a 3-D wavelet-based multi-directional de-noising scheme where each volume in a 4-D fMRI data set is sub-sampled using the axial, sagittal and coronal geometries to obtain three different slice-by-slice representations of the same data. The filtered intensity value of an arbitrary voxel is computed as an expected value of the de-noised wavelet coefficients corresponding to the three viewing geometries for each sub-band. This results in a robust set of de-noised wavelet coefficients for each voxel. Given the decorrelated nature of these de-noised wavelet coefficients; it is possible to obtain more accurate source estimates using ICA in the wavelet domain. The contributions of this work can be realized as two modules. First, the analysis module where we combine a new 3-D wavelet denoising approach with better signal separation properties of ICA in the wavelet domain, to yield an activation component that corresponds closely to the true underlying signal and is maximally independent with respect to other components. Second, we propose and describe two novel shape metrics for post-ICA comparisons between activation regions obtained through different frameworks. We verified our method using simulated as well as real fMRI data and compared our results against the conventional scheme (Gaussian smoothing + spatial ICA: s-ICA). The results show significant improvements based on two important features: (1) preservation of shape of the activation region (shape metrics) and (2) receiver operating characteristic (ROC) curves. It was observed that the proposed framework was able to preserve the actual activation shape in a consistent manner even for very high noise levels in addition to significant reduction in false positives voxels.