A Digital Video Quality (DVQ) apparatus and method that incorporate a model of human visual sensitivity to predict the visibility of artifacts. The DVQ method and apparatus are used for the evaluation of the visual quality of processed digital video sequences and for adaptively controlling the bit rate of the processed digital video sequences without compromising the visual quality. The DVQ apparatus minimizes the required amount of memory and computation. The input to the DVQ apparatus is a pair of color image sequences: an original (R) non-compressed sequence, and a processed (T) sequence. Both sequences (R) and (T) are sampled, cropped, and subjected to color transformations. The sequences are then subjected to blocking and discrete cosine transformation, and the results are transformed to local contrast. The next step is a time filtering operation which implements the human sensitivity to different time frequencies. The results are converted to threshold units by dividing each discrete cosine transform coefficient by its respective visual threshold. At the next stage the two sequences are subtracted to produce an error sequence. The error sequence is subjected to a contrast masking operation, which also depends upon the reference sequence (R). The masked errors can be pooled in various ways to illustrate the perceptual error over various dimensions, and the pooled error can be converted to a visual quality measure.