The dominant source of error in ATM networks is due to buffer overflow in congested conditions, which results in cell loss. To meet the end users' quality of service (QOS) requirements, automatic repeat request (ARQ) and forward error correction (FEC) techniques are two candidates for loss compensation. The FEC technique is appropriate for real-time traffic, although it also causes increases in network loads and loss rates. The situation is worse for non-real-time and loss-sensitive bursty data traffic that experience more congestion when FEC is not applied. In this paper we present a prioritized FEC mechanism combined with selective cell discarding, in which low-priority FEC cells are discarded first in the event of congestion in order to improve the block loss performance. The mechanism is simple to implement, and the block loss rate is reduced compared with the original FEC method. (C) 1997 Elsevier Science B.V.