Methods and devices for encoding and decoding data using transform domain filtering are described. The encoder determines a set of transform domain filter coefficients to be applied to a transform domain prediction. The filtering may, in some cases, also apply to transform domain reconstructions. Rate-distortion optimization may be used to determine the optimal filter coefficients on a frame-basis, coding-unit-basis, or other basis. Multiple filters may be developed and communicated from the encoder to the decoder for different combinations of transform block size, coding mode, prediction mode, and texture type. In other cases, the filtering is applied in the pixel-domain to a pixel-domain prediction or a pixel-domain reconstruction of a block of samples.