In view of the 56 KBPS digital switched network services and the ISDN, low bit rate codecs for providing real time full motion color video are under various stages of development. Some companies have already brought the codecs into the market. They are being used by industry and some Federal Agencies for video teleconferencing. In general, these codecs have various features such as multiplexing audio and data, high resolution graphics, encryption, error detection and correction, self diagnostics, freezeframe, split video, text overlay etc. To transmit the original color video on a 56 KBPS network requires bit rate reduction of the order of 1400:1. Such a large scale bandwidth compression can be realized only by implementing a number of sophisticated,digital signal processing techniques. This paper provides an overview of such techniques and outlines the newer concepts that are being investigated. Before resorting to the data compression techniques, various preprocessing operations such as noise filtering, composite-component transformation and horizontal and vertical blanking interval removal are to be implemented. Invariably spatio-temporal subsampling is achieved by appropriate filtering. Transform and/or prediction coupled with motion estimation and strengthened by adaptive features are some of the tools in the arsenal of the data reduction methods. Other essential blocks in the system are quantizer, bit allocation, buffer, multiplexer, channel coding etc.