We have developed a low bit-rate video coding using a video digital signal processor (DSP) called VDSP1χ, which performs real-time encoding and decoding for discrete cosine transform-(DCT-) based algorithms, such as ITU-T H. 261, H. 263 and wavelet-based subband encoding algorithms. This LSI features a processing unit which implements wavelet filters at high speeds, a compact DCT circuit, and a fast, flexible DRAM interface for low-cost systems. This system is capable of processing quarter common intermediate format (QCIF)(176144 pixels) size pictures at a rate greater than 15 frames/s.