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An efficient intra-mode search algorithm is proposed to reduce the computational complexity of inter-frames for the H.264/AVC video encoding system. Each intra-mode search procedure usually causes a high degree of complexity in an inter-frame because of the inter-frame prediction modes that operate with the inter-mode decision procedure. To decrease this computational burden, the authors propose an adaptive thresholding algorithm based on distribution characteristics of the sum of the absolute differences (SAD) of the best inter-mode when the intra-mode is the final coding mode. The authors also include a simple refinement process by using the spatial correlation between neighbouring macro-blocks (MBs) and the current MB. The performance of the proposed algorithm is verified through comparative analysis of encoding time, loss of quality and the bit increment.