The discrete cosine transform (DCT) has become an important tool in digital signal processing because its performance is close to the optimal Karhunen-Loeve transform. In this work the running discrete cosine transform (RDCT) is introduced. Using the properties of the discrete Fourier transform kernel W = exp (-2 pi j/N), a fast recursive algorithm was developed for real-time computation of the RDCT coefficients. For N-point RDCT the present algorithm needs only 2N real multiplications. The hardware implementations of the RDCT algorithm and applications in real-time data processing are discussed.