The importance of video image transmission and storage is growing rapidly, as medical, business, and military technologies utilizing images are developed. Low cost image data compression systems offer image communication opportunities in personal computers, remote imaging, medical imaging, and engineering workstation environments. Utilizing a predictive coding technique, a real-time (10MHz throughput) special purpose machine has been built to accomplish image data compression economically. The basic machine contains less than 100 chips and has demonstrated high quality compression at ratios of 2:1, 4:1, and 8:1. Further compression via the use of add-on modules is possible.