This paper presents a fast algorithm for H.264 fractional motion estimation (ME). In H.264 ME is the most time consuming component. The ME process consists of two stages: integer pixel and fractional pixel search. To reduce the complexity of fractional pixel ME we propose a quadrant based directional fractional pixel ME algorithm that is based on the unimodal property of the fractional pixel error surface. Better computation reduction has been achieved by using this strategy. Experimental results show that as compared to fast sub-pel ME proposed in H.264, the proposed method can speedup fractional ME, with a negligible degradation in video quality.