This paper presents a region-based video compression algorithm based on texture warping and synthesis. Instead of encoding whole images or prediction residuals after translational motion estimation, this algorithm employs a perspective motion model to warp static textures and uses a texture synthesis approach to synthesise dynamic textures. Spatial and temporal artefacts are prevented by an in-loop video quality assessment module. The proposed method has been integrated into an H.264 video coding framework. The results show significant bitrate savings, up to 55%, compared with H.264, for similar visual quality.