We present a Bayesian framework that combines motion (optical flow) estimation and segmentation based on a representation of the motion field as the sum of a parametric field and a residual field. The parameters describing the parametric component are found by a least squares procedure given the best estimates of the motion and segmentation fields. The motion field is updated by estimating the minimum-norm residual field given the best estimate of the parametric field, under the constraint that motion field be smooth within each segment. The segmentation field is updated to yield the minimum-norm residual field given the best estimate of the motion field, using Gibbsian priors. The solution to successive optimization problems are obtained using the highest confidence first (HCF) or iterated conditional mode, (ICM) optimization methods. Experimental results on real video are shown.