It is possible to get high compression rate for the interrelationship between neighboring frames of moving pictures. The kernel of research on video compression is that the efficient image compression algorithm is adopted while the interrelationship between neighboring frames and time consumption is concerned to improve the compression efficiency. It is significant that motion compensation is applied to video compression, nevertheless it is too time consuming. A vector coding method based on wavelet transform is presented to avoid searching procedure of motion compensation. Simulation shows that high compression rate is achieved with less time consumption.