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This paper presents an improved macroblock (MB) level rate control algorithm for MPEG-4 object coding. Motivated by the statistical analysis of the coding of MBs and VOPs for typical sequences, a refined quadratic rate-distortion model is proposed in the new MB rate control algorithm. The basic idea is to exploit the statistical coding property of a group of MBs coded by an identical QP rather than an individual MB to do the modeling, thereby producing more stable quantization parameter to improve the estimation and coding performances. In addition, some improved measures which explore the new model for coding the MBs in a VOP are incorporated. Simulation results show that the proposed algorithm can achieve the much smoother bit rate and better picture quality in terms of PSNR than the MPEG-4 VM18 algorithm for the tested sequences.