An improved block-matching algorithm for fast motion estimation is proposed. The matching criterion is the sum of absolute difference. The basic idea is to obtain the best estimation of motion vectors by an optimization of the search process which can terminate the time-consuming computation of matching evaluation between the current block and the ineligible candidate block as early as possible and eliminate the search positions as many as possible in the search area. The performance of this algorithm is evaluated by theoretic analysis and compared with the full search algorithm (FSA). The simulation results demonstrate that the computation load of this algorithm is much less than that of FSA, and the motion vectors obtained by this algorithm are identical to those of FSA.