SUMMARYWe describe how wavelets constructed out of finite element interpolation functions provide a simple and convenient mechanism for both goal-oriented error estimation and adaptivity in finite element analysis. This is done by posing an adaptive refinement problem as one of compactly representing a signal (the solution to the governing partial differential equation) in a multiresolution basis. To compress the solution in an efficient manner, we first approximately compute the details to be added to the solution on a coarse mesh in order to obtain the solution on a finer mesh (the estimation step) and then compute exactly the coefficients corresponding to only those basis functions contributing significantly to a functional of interest (the adaptation step). In this sense, therefore, the proposed approach is unified, since unlike many contemporary error estimation and adaptive refinement methods, the basis functions used for error estimation are the same as those used for adaptive refinement. We illustrate the application of the proposed technique for goal-oriented error estimation and adaptivity for second and fourth-order linear, elliptic PDEs and demonstrate its advantages over existing methods.