Abstract. We introduce the concept of Dynamic Rate Shaping, a technique to adapt the rate ofcompressed video bitstreams MPEG-1, MPEG2, H.261, as well as JPEG to dynamically varying rate and delay constraints. The approach provides an interface or lter between the encoder and the network, with which the encoder's output can be perfectly matched to the network's quality of service characteristics. Since the presented algorithms do not require interaction with the encoder, they are fully applicable to precoded, stored video as in, for example, video-on-demand systems. By providing decoupling of the encoder and the network, universal interoperability can be achieved. A set of lowcomplexity algorithms for dynamic rate shaping is presented, and both optimal and extremely fast designs are discussed. The latter are simple enough to allow software-based implementation. Experimental results are provided using actual MPEG-2 bitstreams.