MPEG-4 Part 2, MPEG-4 Visual (formally ISO/IEC 14496-2) is a video compression format developed by the Moving Picture Experts Group (MPEG). It belongs to the MPEG-4 ISO/IEC standards. It uses block-wise motion compensation and a discrete cosine transform (DCT), similar to previous standards such as MPEG-1 Part 2 and H.262/MPEG-2 Part 2.
Several popular codecs including DivX, Xvid, and Nero Digital implement this standard. Note that MPEG-4 Part 10 defines a different format from MPEG-4 Part 2 and should not be confused with it. MPEG-4 Part 10 is commonly referred to as H.264 or AVC, and was jointly developed by ITU-T and MPEG.
MPEG-4 Part 2 is H.263 compatible in the sense that a basic H.263 bitstream is correctly decoded by an MPEG-4 Video decoder. (MPEG-4 Video decoder is natively capable of decoding a basic form of H.263.) In MPEG-4 Visual, there are two types of video object layers: the video object layer that provides full MPEG-4 functionality, and a reduced functionality video object layer, the video object layer with short headers (which provides bitstream compatibility with base-line H.263). MPEG-4 Part 2 is partially based on ITU-T H.263. The first MPEG-4 Video Verification Model (simulation and test model) used ITU-T H.263 coding tools together with shape coding.