Recording and real time reconstruction of digital hologram sequences have recently become feasible. The amount of information that such hologram sequences contain results in voluminous data files, rendering their storage and transmission impractical. As a result, compression of digital hologram sequences is of utmost importance for practical applications of hologram sequences. In the absence of a specific hologram sequence compression technique, a first concern is how a high-performance conventional video compression technique would perform. Such a technique would not be optimized for hologram sequences but would provide a threshold that all hologram sequence compression techniques should reach. In this paper, the use of MPEG-4 part 2 video coding algorithm for the compression of hologram sequences is investigated. Although the algorithm was originally developed for the compression of ordinary video, we apply it on digital hologram sequences and investigate its performance. For this, appropriate digital hologram sequences are used to asses how the coding algorithm affects their information content. In addition, we investigate whether MPEG-4 interframe coding, which aims to achieve compression by exploiting similarities across adjacent frames of the sequence, offers any advantage compared to intraframe coding, where each frame is coded independently. Results show that the MPEG-4 coding algorithm can successfully compress hologram sequences to compression rates of ~ 20 : 1 while retaining the reconstruction quality of the hologram sequences.© (2009) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.