An end-to-end rate-distortion optimized motion estimation method for robust video coding in lossy networks is proposed. In this method the expected reconstructed distortion after transmission and the total bit rate for displaced frame difference are estimated at the encoder. The results are fed into the Lagrangian optimization at the encoder to perform motion estimation. Here the encoder automatically finds an optimized motion compensated prediction by estimating the best trade off between coding efficiency and end-to-end distortion. Computer simulations in lossy channel environments were conducted to assess the performance of the proposed method. A comparative evaluation using other conventional techniques from the literature was also conducted.