An adaptive technique for block-based motion estimation (ME) which leads to significantly higher compression over a non-adaptive application of block matching algorithms (BMAs) is presented. The proposed technique, the adaptive search window method (ASWM), adaptively determines the location and size of the search window based on motion information of the surrounding blocks. This window is then used to compute the motion vectors. Simulations indicate that the performance of the BMAs is significantly improved when implemented using ASWM. Further, the proposed technique is implemented as part of an MPEG coder and the results showing the compression gains are discussed.