Abstract: This invention uses a novel synthesis of several different compression methods, some original and some known in the art, to achieve compression of digitized video image sequences. Images are color-reduced by a factor of two in both directions using a colorspace that requires minimal computation for reconstruction of RGB pixel values. Images are then transformed into a `token sequence` corresponding to a series of 4.times.4 blocks, using one of seven transformation methods, some dependent on previous frames and some dependent only on pixel values in neighboring blocks. The resulting token sequence is then compressed using known lossless methods, including Huffman coding.