A quantized PCM mode includes the step of quantizing samples so that distortion is added to coded video. In this way, video blocks coded with quantized PCM appear more uniformly with adjacent video blocks that have been coded with other lossy compression techniques, such as inter-prediction coding or intra-prediction coding. A video encoder may first quantize input video samples with a quantization step prior to PCM coding the quantized samples. This quantization step may be signaled to a decoder in the encoded video bitstream. A video decoder may receive the encoded video bitstream that includes quantized PCM coded video samples. These samples are first decoded using pulse code demodulation and then are inverse quantized with the same quantization step used to encode the video. The video decoder may extract this quantization step from the output bit-depth in the encoded video bitstream.