The Hilbert-based time-frequency analysis has promising capacity to reveal the time-variant behaviors of a system. To admit well-behaved Hilbert transforms, component decomposition of signals must be performed beforehand. This was first systematically implemented by the empirical mode decomposition (EMD) in the Hilbert-Huang transform, which can provide a time-frequency representation of the signals. The EMD, however, has limitations in distinguishing different components in narrowband signals commonly found in free-decay vibration signals. In this study, a technique for decomposing components in narrowband signals based on waves’ beating phenomena is proposed to improve the EMD, in which the time scale structure of the signal is unveiled by the Hilbert transform as a result of wave beating, the order of component extraction is reversed from that in the EMD and the end effect is confined. The proposed technique is verified by performing the component decomposition of a simulated signal and a free decay signal actually measured in an instrumented bridge structure. In addition, the adaptability of the technique to time-variant dynamic systems is demonstrated with a simulated time-variant MDOF system.