Perfect reconstruction (PR) FIR filter banks, obtained by modulation of a linear-phase, lowpass, prototype filter and of length 2Mm are well known. Recently, PR modulated filter banks (MFBs) with the analysis and synthesis banks obtained from different prototypes have been reported. This paper describes a general form of modulation that includes modulations used in the literature. This modulation depends on an integer parameter, the modulation phase. The PR property is characterized for MFBs with finite and infinite impulse response filters. The MFB PR problem reduces to roughly M/2 two-channel PR problems. A natural dichotomy in the PR conditions leads us to the concepts of Type 1 and Type 2 MFBs. Unitary MFBs are characterized by the M/2 two-channel PR filter banks also being unitary (for FIR filters of length N = 2Mm, these results are given in (Malvar, Electr Lett. 26, June 1990, 906–907; Koilpillai and Vaidyanathan, IEEE Trans. SP40, No. 4, Apr. 1992, 770–783)). We also give a necessary and sufficient condition for a large class (including FIR) unitary MFB prototypes to have symmetric (even or odd) prototype filters, and exhibit unitary MFBs without symmetric prototypes. A parameterization of all FIR unitary MFBs is also given. An efficient design procedure for FIR unitary MFBs is developed. It turns out that MFBs can be implemented efficiently using Type III and Type IV DCTs. Compactly supported modulated wavelet tight frames are shown to exist and completely parameterized. K-regular modulated WTFs are designed numerically and analytically by solving a set of non-linear equations over the parameters. Design of optimal modulated WTFs for the representation of any given signal is described with examples, and this is used to design smooth modulated WTFs.