Abstract: According to H.264/AVC specific codec architecture, a novel watermarking algorithm with symbol encoding is proposed. Based on the analysis of requantization transcoding, the macroblock used for watermarking is selected with the combination of texture complexity and rate-distortion cost. The problem of watermark synchronization between the sender and receiver can be solved. The watermark information is embedded by slight modulating the coefficients with specific symbol encoding, instead of directly adding the watermark to the quantized coefficients. Experimental results reveal that the proposed scheme is robust against attacks such as requantization transcoding, additive white Gaussian noise, brightness and contrast adjustment, while preserving the perceptual quality.