Video coding is a complex process, comprising a combination of spatial, temporal and statistical data reduction techniques. Of these techniques, motion estimation taking advantage of inter-frame information redundancy plays the most vital role. The overwhelming complexity of motion estimation using a brute-force search has prompted researchers to propose myriad of algorithms, yet finding the "most efficient" algorithm remains an open research problem. Recently, the MPEG-4 committee, after a rigorous evaluation, have recommended a motion estimation algorithm that performs very well in terms of speed and picture quality. In this paper, we propose a motion estimation algorithm that is a combination of a number of novel ideas for finding more accurate motion vectors and with a faster speed. The proposed algorithm, named as adaptive motion search with elastic diamond (AMSED) algorithm, takes advantages of the correlation between motion vectors in both spatial and temporal domains...