Orthogonal Wavelet Division Multiplexing (OWDM) is one of the multicarrier Modulation techniques. As all multicarrier modulation (MCM) techniques the main problem is the high Peak to Average Power Ratio (PAPR). In this paper a novel PAPR reduction method for OWDM systems is proposed, in which, a full wavelet packet tree is dynamically structured through joining and splitting to achieve a tree with minimum PAPR. Specifically, data symbols with different mappings through different tree structures are threshold controlled in order to concentrate the whole signal power in the most effective ones, and the sequence with smallest PAPR is transmitted. The information about the selected tree is sent as side information similar to techniques such as selective mapping (SLM) in OFDM systems. Although the side information represents some redundancy, the proposed scheme achieves significant reduction in PAPR at the cost of some computational complexity. The simulation results show that the complementary cumulative distribution function (CCDF) of the PAPR with the proposed algorithm shows about a 3 dB improvement over the original OFDM signal.