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The variable block-size motion estimation (VBSME) is the most time-consuming component in H.264/AVC encoder. This paper presents a simple hardware-oriented VBSME method with an adaptive computation-aware motion estimation (ME) algorithm. To reduce the complexity, VBSME is driven by the 16×16 mode and performed jointly for all modes. Moreover, this approach is integrated with a few other fast ME algorithms to demonstrate the efficiency of the adaptive ME. As a measure of efficiency, a cost function which combines the reconstruction error and the bit-rate is proposed. Obtained results show high efficiency of the adaptive strategy and a small negative influence of the proposed VBSME method on performance. It is also observed, that the increase of the number of search points (SPs) per macroblock (MB) over a certain threshold does not have to lead to the quality improvement.