MPEG-4 is one of the latest (audio and video) compression method standardized by MPEG group, designed specially for low-bandwidth (less than 1.5MBit/sec bitrate) video/audio encoding purposes.

Probably the best-known MPEG-4 video encoders are called DivX and XviD, which both are nowadays fully standard-compliant MPEG-4 encoders.

It should be noted that unlike MPEG-1 and MPEG-2, the MPEG-4's predecessors, MPEG-4 itself isn't just one unified encoding mechanism, but rather a group name for several flavors of video and audio encoding methods that share certain same characteristics. These "flavors" are often referred either as "profiles" or "layers" in MPEG-4 compression scheme and each new profile should be backwards compliant to the older, "lower" versions of MPEG-4 in terms of playback capability.

The most common MPEG-4 layers that XviD and DivX both use extensively are called simple profile and advanced simple profile. After those two standardized video encoding layers, MPEG-4 group has standardized several new layers -- most important ones are h263+ (which is used widely in mobile phone's, dubbed as 3GP) and h.264 (often also called as AVC).