We describe a recursive technique to perform motion compensated enhancement of image- sequences. This technique incorporates an explicit noise model as well as an optic-flow based model for temporal evolution of image intensity. Based on these models, it computes the optimal estimate of the instantaneous image intensity in an incremental fashion -- the estimate improves over time. Furthermore, the technique does not blur moving regions in the imagery. We have applied it to enhance a wide variety of medical image sequences used in fluoroscopy, cine-angiography, etc. In these x-ray based procedures, our technique offers a twofold promise of enhancing image quality while maintaining the current radiation dosage, and reducing radiation dosage while maintaining the current image quality. The computational framework of our technique is comprised of (1) an estimation-theoretic technique to recover the instantaneous optic-flow field without blurring its discontinuities, (2) a warping mechanism that eliminates the interframe motion between two successive images, and (3) a Kalman filter that performs temporal filtering to improve the image quality in an incremental fashion.