We propose an algorithm that accomplishes transform-coded, spatiotemporal, pel-recursive video compression. Traditional pel-recursive coders obtain sophisticated spatio-temporal predictions for the current pixel based on previously decoded data. The resulting per-pixel prediction errors are encoded independently so that the decoder can use previously-encoded pixels in the prediction of the current. It is well-known that pel-recursive coders significantly under-perform modern hybrid coders which use comparatively very simple predictors but transform code the prediction errors. Our algorithm combines the accurate predictors of pel-recursive techniques with transform coders so that the strengths of both approaches can be taken advantage of. In the proposed work, the decoder transform decodes the residuals for a block and then acts like a simple pel-recursive decoder for the pixels of that block. We show that the proposed algorithm can be seen as the use of a pel-recursion enabling transform at the encoder, which generates and encodes the correct transform coefficients to avoid error propagation at the decoder. A straightforward implementation of our work (implemented as an extension of HEVC that preserves independent decodability of INTER blocks) shows compression improvements over the baseline HEVC.