When the acoustic method is used to measure oil well dynamic liquid level data, the collected signal will be affected by complex background noise, which makes the position of the tubing coupling echo and the liquid level echo easily submerged in the noise and difficult to identify. Therefore, this paper proposes an estimation method of downhole dynamic liquid level depth that integrates four kinds of signal processing methods. Firstly, Butterworth low-pass filter (BLPF) is used to filter the tubing coupling echo, so as to smooth the signal. Secondly, the average amplitude difference function (AMDF) is used to identify the average periodic sampling points of the tubing coupling echo, so as to calculate the propagation speed of acoustic wave in the oil well. On this basis, the liquid level echo is filtered by wavelet denoising (WD), and then the wavelet singular value detection (WSVD) is used to detect the position of the liquid level reflected wave, so as to calculate the propagation time of the acoustic wave in the oil well. Finally, the depth of oil well liquid level is calculated according to the speed and time of acoustic wave propagation theory. The stability and effectiveness of the proposed method under different sound velocities and different well depths are verified by testing multiple sets of acoustic signals obtained in the laboratory and field. Compared with other existing signal processing methods, the average relative error of the proposed method is about 0.18%. Therefore, the methods can meet the actual engineering needs.