Wavelets are generated from refinable functions by using multiresolution an
alysis. In this paper we investigate the smoothness properties of multivari
ate refinable functions in Sobolev spaces. We characterize the optimal smoo
thness of a multivariate refinable function in terms of the spectral radius
of the corresponding transition operator restricted to a suitable finite d
imensional invariant subspace. Several examples are provided to illustrate
the general theory.