This paper focuses on the "sprite coding" that supports the MPEG-4 Version 1 Main profile in order to transfer "near VHS quality video" across narrow-band transmission links such as the Internet. Automatic VOP (Video Object Plane) generation technologies are being studied as one of the most important issues of MPEG-4 object coding. This paper proposes a two-layer VOP generation scheme with some core algorithms such as GME (Global Motion Estimation), foreground moving object extraction, and background sprite generation. This paper also describes a shape information reduction method for the foreground object. The foreground object is object-coded in the , while the background sprite is coded using sprite coding in MPEG-4. We call this coding scheme "sprite mode"; MPEG-4 simple profile coding is called "normal mode". Experiments are conducted on VOP generation and video coding with MPEG-4. We compare sprite mode to normal mode. The coding efficiency of sprite mode is several times higher than that of normal mode at the same objective image quality if the foreground ratio is within 10-15%. Given the target of very low bitrate (128kbps, 64kbp) rate coding, sprite mode achieved almost the same SNR but more than twice the frame rate compared to normal mode.