The detection of faults in the wheelset-bearing system is crucial for guaranteeing the safety of train operations. The core is to extract the optimal resonance band (ORB) and repetitive transient impact signals from the collected axle box acceleration signals. Accordingly, a novel automatic fault detection method called the bidirectional iterative merging multi-Q tunable-Q wavelet transform (BIMMQTQWT) is proposed to address the issue that existing methods are vulnerable to background noise and irrelevant components. First, a series of band-pass filters with almost constant bandwidth are constructed by the improved multi-Q tunable-Q wavelet transform (IMQTQWT) derived from the fault characteristics. Second, the fault information contained in each sub-band coefficient is preliminarily estimated using the correlative envelope comprehensive indicator (CECI). Third, the ORBs are automatically selected using the maximum CECI based on a strategy called bidirectionally merging adjacent frequency bands (BIMFBs). Finally, Envelope demodulation based on the ORB is executed followed by identifying bearing faults. The effectiveness in detecting multiple wheelset-bearing faults of the proposed method is validated through simulation and bench experiment signals. And the superior performance of the proposed method is exhibited compared with the existing average infogram and resonance sparse decomposition.