This paper presents a novel framework of motion compensated pre&ction(MCP) techniques in the wavelet domain for high performance video coding. Our analysis reveals fundamental limitations with previous ad-hoc wavelet-based video coders from motion accuracy point of view. We demonstrate that the phase associated with any wavelet transform carries critical information of the motion accuracy and propose to restore the motion accuracy by considering the wavelet coefficients of the previous frame with all different phases. Our all-phase MCP approach can be viewed as predicting the wavelet coefficients from an over-complete expansion of the previous frame. Experiment results have shown that restoration of motion accuracy in the wavelet domain can dramatically improve the efficiency of MCP. The video coder(MCP-WT)built upon MCP of wavelet coefficients has achieved 2-3dB gain over existing MPEG-2 coder at the bit rate of 1-9Mbps. Moreover, MCP techniques in the wavelet domain offer a prom...