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In this paper, we develop an error resilient variant of the MPEG-4 embedded zerotree wavelet coder, suitable for mobile fading channels. The residual redundancy in the compressed bit stream provides implicit error protection through the use of source-controlled channel decoding; no explicit channel coding is used. We propose two slight modifications to the MPEG-4 coder. The first removes the arithmetic coding in the lowest frequency subband so that hidden Markov model-based MAP estimation of both the source index and the channel state can be easily applied. The change in bit rate is negligible, while performance during severe channel fading conditions can be greatly increased. The second modification adds variable length packetization to the compressed bit stream created from the higher frequency subbands. The individual packets are independently decodable. An optional rearrangement of the bits in each packet allows MAP estimation to be applied to these subbands as well. Simulation results show a significant performance improvement for the overall system.