Abstract: This paper proposes a fast motion estimation algorithm for MPEG-4 shape coding. The proposed algorithm takes advantage of inherent properties of shape coding as well as shape information, i.e., context-based motion estimation feature, motion vector correlation between neighboring binary alpha blocks, and binary feature of shape information. Simulation results show that the algorithm can reduce the computational complexity of motion estimation for shape coding and achieve a high processing speed. Therefore, the algorithm is suitable for real-time software implementation of MPEG-4 shape coding.