Abstract: Motion estimation is most time consuming part of the H.264 encoder. Block-matching motion estimation is vital to many motion compensated video coding techniques, which is aimed to exploit the strong temporal redundancy between successive frames. However, the motion estimation is quite computational intensive and can consume up to 80% of the computational power of the encoder if the full search is used by exhaustively evaluating all possible candidate blocks within a search window. Therefore, fast search algorithms are highly desired to significantly speed up the process without sacrificing the distortion seriously. The major motivation behind this project is to improve the existing H.264 codec by reducing the complexity in the parameters like speed and bandwidth. The block matching algorithms have most of the impact on the encoder performance, and hence the key idea here is that if the proposed algorithm improves bandwidth or speed then we can easily integrate that into well known H.264 codec, which is used by huge number of the applications.