A DCT-based coding system for 130 Mbps HDTV transmission in ATM networks Is described. In light of the available high bit rate and the high-speed processing requirement for HDTV, the system employs low-complexity 8 x 4 intrafield DCT coding. Major processing used by this system includes simplified frequency weighting, effective block to linear scans, interblock DPCM for DC terms, nonuniform quantization, and two-dimensional entropy coding. These processing modules were carefully designed with great concern for system complexity. While it is a relatively low-complexity system, simulations show that it can achieve high-quality coding at 130 Mbps. For transmission over the ATM networks at the H4 access rate of approximately 130 Mbps, the HDTV services are likely constant-bit-rate type services. Therefore, transmit buffer and rate control are needed to regulate bit rate and smooth out the fluctuations due to the use of variable length codes and the variations in the scene. A simple rate statistics model is established based on the rates obtained for a group of test pictures. This simple but accurate model is shown to select a desired coding mode quickly. Cell loss due to network congestion and cell misdelivery in the ATM may seriously degrade picture quality. To avoid error propagation due to the use of variable length codes, a packet assembly format is proposed. Such a protection may not be adequate for the expected cell loss rates. Consequently, a two-layer system that segments the coefficients into a main signal and an enhancement signal is employed. The two signals am separately assembled into cells for transmission over the ATM networks with different priorities. Simulation results show that the two-layer DCT system is robust against cell loss.