This paper presents a method for fast encoding and decoding of image sequences based on fractal coding theory and the hybrid coding concept. The DPCM-loop accounts for statistical dependencies of natural image sequences in temporal direction. Those regions of the original image where the prediction, i.e., motion estimation, and compensation fails are encoded using an advanced fractal coding scheme which originally was developed for encoding of still images. Similar to conditional replenishment coders, not regions of the residual image itself but of the original image are encoded. The introduction of a fractal coding scheme instead of the commonly used DCT turns out to be advantageous especially at very low bit rates (8 - 64 kbit/s). In order to increase reconstruction quality, encoding speed and compression ratio, some additional features such as hierarchical codebook search and multilevel block segmentation, are proposed.