MPEG-4 Fine Granularity Scalability (FGS) provides bandwidth adaptation and error resilience features for streaming applications. In this paper. by estimating the required computational power for FGS in a video encoding system, an efficient FGS implementation method is exploited. With the proposed hardware-oriented optimization approaches, a hardwired FGS block-level processing core is proposed to provide a cost-effective solution to FGS implementation. The proposed hardware core can support FGS profile level 5, frame size 720x516. 30Hz.for real-time streaming applications at 54 MHz.