Reference picture selection (RPS) is the most common error resilience method for robust transmission over lossy networks. However, RPS has been studied for use in realtime encoding, but has not been examined in transmitting an already encoded MPEG bitstream. In this paper, we propose a compressed-domain approach for the efficient implementation of RPS in the pre-encoded MPEG bitstream with minimum requirement on the server complexity. In the proposed algorithm, a novel macroblockbased algorithm is used to adaptively select the necessary macroblocks, manipulate them in compressed-domain and send the processed macroblocks to the receiver. Experimental results show that, as compared to the original RPS, the new algorithm reduces the required server complexity significantly.