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The paper presents a VLSI prototype for context-based adaptive variable length coding (CAVLC). This scheme is a part of the lossless compression process in the MPEG-4 Part 10 standard. It is applied to the quantized transform coefficients of the luminance component during the entropy coding process. In combination with previous transformations and quantizations, it can result in significantly increased compression ratio. The developed architecture is prototyped and simulated using ModelSim 5.4®. It is synthesized using Synplify Pro 7.1®. The results show that the architecture satisfies the real-time constraints required by different digital video applications.