Target/standard discrimination difficulty and the degree of stimulus "novelty" were manipulated systematically in a three-stimulus odd-ball task to assess how these variables affect target and non-target P300 scalp distributions for visual stimuli. Wavelet transformation (WT) analyses were performed on the non-target (P3a) and target (P3b) ERPs to assay how the underlying electroencephalographic (EEG) activity was affected by both the difficulty and novelty factors. When target/standard discrimination was easy, P300 amplitude was higher for the target than the non-target across all electrode sites, and both demonstrated parietal maximums. In contrast, when target/standard discrimination was difficult, non-target amplitude (P3a) was higher and earlier over the frontal/central electrode sites for both levels of novelty, whereas target amplitude (P3b) was greater parietally and occurred later than the non-target components and was generally unaffected by non-target novelty level. The WT analyses indicated that appreciable theta activity was related to the more novel non-target stimuli; primarily target component delta coefficients were affected by the discrimination difficulty variable. The findings suggest that target/standard discrimination difficulty, rather than stimulus novelty, determines P3a generation for visual stimuli but that the underlying theta oscillations are differentially affected by stimulus novelty. WT analysis methods are discussed along with the theoretical and neurophysiological implications of the findings.