Fault diagnosis of rolling mills, especially the main drive gearbox, is of great importance to the high quality products and long-term safe operation. However, the useful fault information is usually submerged in heavy background noise under the severe condition. Thereby, a novel method based on multiwavelet sliding window neighboring coefficient denoising and optimal blind deconvolution is proposed for gearbox fault diagnosis in rolling mills. The emerging multiwavelets can seize the important signal processing properties simultaneously. Owing to the multiple scaling and wavelet basis functions, they have the supreme possibility of matching various features. Due to the periodicity of gearbox signals, sliding window is recommended to conduct local threshold denoising, so as to avoid the "overkill" of conventional universal thresholding techniques. Meanwhile, neighboring coefficient denoising, considering the correlation of the coefficients, is introduced to effectively process the noisy signals in every sliding window. Thus, multiwavelet sliding window neighboring coefficient denoising not only can perform excellent fault extraction, but also accords with the essence of gearbox fault features. On the other hand, optimal blind deconvolution is carried out to highlight the denoised features for operators' easy identification. The filter length is vital for the effective and meaningful results. Hence, the foremost filter length selection based on the kurtosis is discussed in order to full benefits of this technique. The new method is applied to two gearbox fault diagnostic cases of hot strip finishing mills, compared with multiwavelet and scalar wavelet methods with/without optimal blind deconvolution. The results show that it could enhance the ability of fault detection for the main drive gearboxes.