In this paper, we present a novel energy compaction method, the selective block reordering, which is used with SPIHT (SBR-SPIHT) coding for low rate video coding to enhance the coding efficiency for motion-compensated residuals. The inter-frame coding basically includes three major parts -motion estimation, motion compensation, and motion-compensated residual coding. The motion estimation and overlapped block motion compensation (OBMC) methods of H.263 are used to reduce the temporal redundancy. The motion-compensated residuals are encoded in the wavelet domain. The block-mapping reorganization utilizes the wavelet zerotree relationship that jointly presents the wavelet coefficients from the lowest subband to high frequency subbands at the same spatial location, and allocates each wavelet tree with all descendents to form a wavelet block. The block reordering based on the threshold scan rearranges the significant blocks in the descending order of the energy. Then, the block reordering technique reorders the wavelet sub-blocks recrusively, according to the energy of each sub-block, to yield the maximum energy compaction that allows the SPIHT coding to operate efficiently on the motion-compensated residuals. Simulation results demonstrate that SBR-SPIHT outperforms H.263 by 1.28~0.69 dB on average for various video sequences at very low bit-rates, ranging from 48 to 10 kbps.