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In this paper, we propose a novel fast mode decision scheme for intra-frame and inter-frame in the H.264/AVC video coding standard. This algorithm only computes the best likely modes which are selected by the value of variance (second moment). The variance is used to measure the smoothness and coarseness of the texture, and then a few modes are selected according to the value of variance. The proposed algorithm combines the variance and the threshold, which can remarkably reduce the computational complexity and improve the coding efficiency. Experimental results show that the combination of the proposed algorithm and Jeonpsilas algorithm can reduce encoding time by 52% on average, whereas the PSNR maintains similar and the bit rate has a tiny increase.