A stream of data is encoded by applying a multilevel transform to the stream of data, each level of the transform producing one or more transform coefficients for each block of a sequence of blocks in the stream of data. Encryption is applied to at least a subset of the transform coefficients produced by a least one level of the multilevel transform. Furthermore, at least one level of the multilevel transform is applied to the encrypted transform coefficients. The multilevel transform and encryption operations generate a result set of transform coefficients. The result set of transform coefficients may be encrypted, using a symmetric key encryption, to generate an output data stream that is then transmitted from a sending device to a receiving device. The encoding method may be performed in real time, producing the output data stream at a same rate as the stream of data is presented for encoding.