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We explore a new perceptually-adaptive video coding (PVC) scheme in the motion-compensated prediction loop for hybrid video compression, aiming at better perceptual coding quality and operational efficiency. A new just noticeable distortion (JND) estimator for color images/video is first devised in image-domain based on our introduced nonlinear additivity model for masking (NAMM). Secondly, the image-domain JND profile is incorporated into hybrid video encoding via the JND-adaptive motion estimation (ME) and residue filtering. The scheme works with any prevalent video coding standards and various ME strategies. As an example of implementation, it is applied to the MPEG-2 TM5 coder and demonstrated to achieve average improvement of over 18% in ME efficiency, 0.6 dB in perceptual coding quality and most remarkably, 0.17 dB in the objective coding quality measure (PSNR).