A motion picture compression scheme using subband coding with motion compensation is presneted in this paper. A hierarchical subband decomposition is used to split the image signal into 10 subbands with a 3-layer pyramid structure and motion compensation is used in each band. However, in this case, motion vector information is drastically increased; therefore, initial motion vectors are estimated in the highest pyramid and motion vectors are refined using the reconsructed subband signal in each layer. Simulation results show that the proposed method compares favorably in terms of prediction error energy and side informatio with methods requiring additional information. Images recostructed from the proposed method show good quality compared to those reconstructed using blockwise DCT.