—In this paper, we present a two-pass intra-refresh transcoder for on-the-fly enhancing error resilience of a compressed video in a three-tier streaming system. Furthermore, we consider the problem of multicasting a video to multiple clients with diverse channel conditions. We propose a MINMAX loss rate estimation scheme to determine a single intrarefresh rate for all the clients in a multicast group. For the scenario that a quality variation constraint is imposed on the users, we also propose a grouping method to partition a multicast group of heterogeneous users into a minimal number of subgroups to minimize the channel bandwidth consumption while meeting the quality variation constraint and achieving fairness among all subgroups. Experimental results show that the proposed method can effectively mitigate the error propagation due to packet loss as well as achieve fairness not only among all sub-groups and also clients in a multicast group.