This paper presents a newly developed wavelet spectral finite element (WFSE) to analyze wave propagation in anisotropic laminated composite plate with a non propagating transverse crack. The WSFE is based on the first-order laminated plate theory, which takes shear deformation into consideration. The developed spectral element captures the exact inertial distribution as the governing partial differential equations (PDEs) are solved exactly in the transformed frequencywavenumber domain. Wavelet transform is used to go back and forth between time and frequency domains. The developed procedure is very efficient computationally compared to conventional finite element (FE) modeling for wave propagation analysis. A transverse crack having an arbitrary length and depth and located parallel to one side of the plate is modeled using WSFE. Elastic behavior of the plate at crack location is considered as a line spring with a varying stiffness along the crack. Time domain results show partial reflections of the excited wave due to cracks at different time instances corresponding to crack locations.