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Block matching motion estimation (BMME) plays a very important role in video coding. The performance of BMME greatly affects the quality of the encoded bit stream. In order to reduce the high computational demands of H.264 video encoder, a fast block matching motion estimation algorithm based on temporal and spatial motion correlation is proposed by the deep research of the characteristics of motion estimation. This algorithm well exploits the correlation between video sequence motion activity and macro-block coding pattern and motion vector statistic characteristics to employ different patterns. Experimental results show that the algorithm, without function losing of PNSR, can not only reduce the search complexity of motion estimation and the high computational demands but also raise the real-time performance of encoder.