A motion compensated lifting (MCLIFT) framework is proposed for the 3D wavelet video coder. By using bi-directional motion compensation in each lifting step of the temporal direction, the video frames are effectively de-correlated. With proper entropy coding and bitstream packaging schemes, the MCLIFT wavelet video coder can be scalable in frame rate and quality level. Experimental results show that the MCLIFT video coder outperforms the 3D wavelet video coder with the same entropy coding scheme by an average of 1.1-1.6dB, and outperforms MPEG-4 coder by an average of 0.9-1.4dB.