This paper presents a system for video object generation and selective encoding with applications in surveillance, mobile videophones, and automotive industry. Object tracking and MPEG-4 compression are performed in realtime. The system belongs to a new generation of intelligent vision sensors called smart cameras, which execute autonomous vision tasks and report events and data to a remote base-station. A detection module signals the object of interest presence within the camera field of view, while the tracking part follows the target to generate temporal trajectories. The compression is MPEG-4 compliant and implements the Simple Profile of the standard, capable of encoding up to four video objects. At the same time, the compression is selective, maintaining a higher quality for the foreground objects and a lower quality for the background representation. This property contributes to bandwidth reduction while preserving the essential information of foreground objects. The system per...