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H.264/AVC video coding standard uses the rate distortion optimization method which determines the best coding mode for macroblock (MB) to improve coding efficiency. Whereas RDO selects the best coding mode, it causes the heavy computational burden comparing with previous standards. In this paper, a fast intra prediction mode decision algorithm using two-path structure is proposed. In the first path, 16times16 intra prediction mode is determined using directional gradients. In the second path, 3 modes instead of 9 modes are chosen for RDO to decide the best mode for 4times4 block. Finally, the two modes determined in the two-path decision process are compared to decide the final block mode. Experimental results show that the computation time of the proposed method is decreased to about 77% of the exhaustive mode decision method with negligible quality loss.