In this paper, by combining the motion compensated transform coding with the sub-band decomposition technique, we present a motion compensated sub-band coding technique (MCSBC) for image sequence coding. Also, several problems related to the MCSBC, such as a scheme for motion compensation in each sub-band, the optimal bit rate allocation to each sub-band, and the efficient VWL coding of the DCT coefficients in each sub-band, are discussed. For an efficient coding, the motion estimation and compensation is performed only on the LL sub-band, but the discrete cosine transform (DCT) is employed to encode all sub- bands in our approach. Then, the transform coefficients in each sub-band are scanned in a different manner depending on the energy distributions in the DCT domain, and coded by using the separate 2-D Huffman code tables, which are optimized to the probability distributions of each sub-band. The performance of the proposed MCSBC technique is intensively examined by computer simulations on the HDTV image sequences. The simulation results reveal that the proposed MCSBC technique outperforms the other coding techniques, especially the well-known motion compensated transform coding technique by about 1.5 dB in terms of the average peak signal to noise ratio.