Interframe wavelet video coding algorithm has received much attention lately because of its high coding efficiency and flexible temporal and spatial scalability. It combines the motion-compensated temporal filtering technique together with the wavelet embedded zeroblock coding technique. Blending these two techniques in a nice manner enables it achieving three types of scalability: SNR, temporal and spatial, in one single bit-stream. However, the performance of the interframe wavelet video coding at low bit-rates is less satisfactory because the bit-rate of the non-scalable motion information is too high. In this paper, we extend the framework of Motion Compensated Embedded Zero Block Coding (MC-EZBC) proposed by RPI (Improved MC-EZBC with Quarter-pixel Motion Vectors, ISO/IEC/JTC1 SC29/WG11 doc. No. m8366, Fairfax, May 2002). Our major contribution is splitting the motion information in MC-EZBC into a few layers. At very low bit-rates only the ‘‘coarse’’ motion vectors are transmitted. Therefore, we are able to produce compressed bit streams at a lower bit-rate and the associated picture quality is significantly better than that of the original scheme. The overhead due to motion information partitioning is negligible at higher rates. Hence, the rate-distortion performance at high rates is about the same as that of the original scheme. In addition, a Hilbert curve scan order is proposed to increase the efficiency up to 5% in encoding the differential motion vectors. r 2004 Elsevier B.V. All rights reserved.