This paper proposes about motion estimation in H.264/AVC encoder. Compared with standards
such as MPEG-2 and MPEG-4 Visual, H.264 can deliver better image quality at the same
compressed bit rate or at a lower bit rate. The increase in compression efficiency comes at the
expense of increase in complexity, which is a fact that must be overcome. An efficient Co-design
methodology is required, where the encoder software application is highly optimized and
structured in a very modular and efficient manner, so as to allow its most complex and time
consuming operations to be offloaded to dedicated hardware accelerators. The Motion
Estimation algorithm is the most computationally intensive part of the encoder which is simulated using MATLAB. The hardware/software co-simulation is done using system generator tool and implemented using Xilinx FPGA Spartan 3E for different scanning methods.