In this paper, we propse an object-oriented coding method in low bit-rate channels using pyramid structure and residual image compensation. In the motion estimation step, global motion is estimated using a set of multiresolution images constructed in a pyramid structure. We split an input image into two regions based on the gradient value. Regions with larte motions obtain observation points at low resolution level to guarantee robustness to noise and to satisfy a motion constraint equation whereas regions with local motions such as eye, and lips get observation points at the original resolution level. Local motion variations and intesity variations of an image reconstructed by the golbal motion are compensated additionally by using the previous residual image component. Finally, the model failure (MF) region is compensated by the pyramid mapping of the previous displaced frame difference (DFD). Computer simulation results show that the proposed method gives better performance that the convnetional one in terms of the peak signal to noise ratio (PSNR), compression ratio (CR), and computational complexity.