Abstract: Localized network coding is a promising technique to improve the performance of a wireless multihop network when multiple concurrent unicast sessions are present in the network. However, most existing mechanisms in this field do not consider the issue that the potential diversity in packet size has a big impact on the coding efficiency. In this paper, the issue of achieving optimal per-byte coding efficiency via localized network coding is studied. An efficient localized network coding mechanism is designed to provide high per-byte coding efficiency. Simulation results show that the designed mechanism can greatly improve the network throughput as compared with existing mechanisms.