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This paper presents a fast binary motion estimation (BME) algorithm using diamond search pattern for MPEG-4 shape coding, which is the key technology for supporting the content-based video coding. Based on the properties of binary shape information, a boundary mask for efficient search positions can be generated. Therefore, a large number of search points can be skipped. Simulation results show that our algorithm combined with diamond shaped zones takes equal bit rate in the same quality but reduces the number of search points marvelously in BME to 0.6% compared with full search algorithm, which is described in MPEG-4 verification mode. The proposed algorithm will reduce computational complexity of shape coding significantly and be suitable for real-time software and hardware applications of MPEG-4 shape coding.