In a virtual 3D city scene, a 3D building model is a must-have element. A 3D reconstruction and rendering algorithm is described in this paper. Model geometry and texture data are simplified separately using LOD model technology. Half-folded mesh algorithm is used to simplify geometric data, while wavelet algorithm is used to compress texture data. Both methods reduce the amount of data that must be stored as well as the amount of data that must be transmitted over the network. To improve the response time of the original algorithm, a Kalman filter correction algorithm is used to optimize the 3D reconstruction beam adjustment algorithm. In this paper, the experimental scheme is used to assess the method. Experiments show that the algorithm reduces the number of primitives drawn by the system while preserving the important geometric features of the scene’s building model. It can also effectively reduce the workload of drawing 3D scenes, improve computer productivity, and reduce computer hardware requirements. This technique is well suited to rendering large-scale 3D urban scenes.