Video transmission over wireless links is an emerging application which involves a time-varying channel. Compared to other transmission media, wireless links suffer from limited bandwidth, and are more likely to see their performance degrade due to multipath fading. Therefore error control mechanisms, which can achieve better video quality with the available bandwidth and recover from the errors due to the channel degradation, are very important in wireless video transmission systems. Many of the proposed wireless communications systems are likely to be two-way so that a return channel can convey information to the transmitter about the channel state. Recent research has considered ways of improving the transmission reliability by making use of the feedback channel for ''closed-loop'' error control, including various forms of retransmission. In this paper we propose a rate control algorithm based on dynamic programming combined with Automatic Repeat reQuest (ARQ) as the error control mechanism. We formalize the constraints imposed by the real-time characteristics of video. We show how when an appropriate model for the channel is available, the overall robustness of the system can be improved through rate control at the source using the channel state information conveyed by the ARQ acknowledgement.