An arbitrary shape region of interest (ROI) coding is presented for scalable wavelet video codec in this paper. The padding of macroblock and polygon matching are employed to estimate the motion of the ROI. The motion vectors derived are set as the motion trajectory of the samples to generate one-dimensional temporal signal, filtered to reduce the temporal redundancy by using motion compensated temporal filtering for arbitrary shape ROI. The Reconstructed quality of the ROI coding can be significantly improved at low bit rate, compared to non-ROI coding. The efficiency of the MCTF based on arbitrary ROI is compared with that of the video object coding in MPEG-4. The ability of the MCTF to reduce the temporal redundancy is better than or comparable to that MPEG-4 to some extent.