The sensor configuration of the magnetostrictive guided wave system can be described as a single continuous transducing element which makes it difficult to separate the individual modes from the reflected signal. In this work we develop the mode decomposition technique employing chirplet transform based on the maximum likelihood estimation, which is able to separate the individual modes from dispersive and multimodal waveform measured with the magnetostrictive sensor, and estimate the time-frequency centers and individual energies of the reflection, which would be used to locate and characterize defects. Simulation results on a carbon steel pipe are presented, which show the accurate mode separation and more discernible time-frequency representation could become enabled using the proposed technique.