Video of Visual Acuity (VA) and Contrast Sensitivity (CS) test charts in a complex background was recorded using a CCD camera mounted on a computer-controlled tripod and fed into real-time MPEG2 compression/decompression equipment. The test charts were based on the Triangle Orientation Discrimination (TOD) test method and contained triangle test patterns of different sizes and contrasts in four possible orientations. In a perception experiment, VA and CS thresholds at the 75% correct level were obtained for three camera velocities (0, 1.0 and 2.0 deg/s or 0, 4.1 and 8.1 pix/frame) and four compression rates (no compression, 4Mb/s, 2Mb/s and 1 Mb/s). VA is shown to be rather robust to any combination of motion and compression. CS however dramatically decreases when motion is combined with high compression ratios. The data suggest that with the MPEG2 algorithm the emphasis is on the preservation of image detail at the cost of contrast loss.