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An efficient lossless video codec based on H.264/AVC that uses the Hadamard transform and adaptive truncation (HTAT) method is proposed. Most lossless video coding algorithms avoid transforms in their coding procedures. However, without this transformation, those lossless video coding algorithms cannot take advantage of data compaction. The HTAT method adopts the Hadamard transform to compact data, where the transformed coefficients are adaptively separated into the quotient parts and remainder parts. The quotient parts can be better encoded by entropy coders due to the energy compaction provided by the Hadamard transform. To ensure lossless coding, the remainders are encoded into compact form after exploring the redundancies caused by the Hadamard transform. Simulation results show that the proposed HTAT method has better coding performance than that of the original H.264/AVC lossless coding, with 6.2% and 3.7% reductions in bit rate for all I frame sequences and IPPP sequences, respectively.