This paper presents a new video-coding technique based on displaced frame difference (DFD) prediction and multiresolution block matching for layered transmission. Starting from the base layer, the algorithm encodes one layer at a time until the design of the top layer is completed. For the encoding of each layer, the DFD prediction and multistage motion-vector quantization (MSMVQ) techniques are employed so that the results of DFD encoding and block matching at previous layers can be used to enhance the coding efficiency at that layer. Numerical results show that the algorithm is effective for the applications where high rate-distortion performance and low computational complexity for layered video transmission are required.