The traditional layered scalabilities can not satisfy the requirements of various multimedia applications commendably. The codecs need to provide rate scalability. In this paper, a high performance embedded bit stream is produced by adopting an improved version of zerotree wavelet coding algorithm and a rate scalable video codec is implemented. However, in the rate scalable coding scheme, a single bit stream needs to keep coding effectiveness in a wider range of bit rates. The performance of the existing solutions can not improve the qualities of the reconstructed frames effectively when the target bit rate is increased.It is pointed out that besides error propagation, the rate scalable algorithm needs to give attention to the frame dependency,then a new algorithm is proposed.The experimental results sgow thow that the proposed algorithm can make the single bit srteam produce better qualities at various data rates.This algorithm can also be used in other rate scalable coding schemes that adopt motion compensation to reduce the temporal redundancy.