In network delivery of digital video, if the bandwidth required for a video is not available, the video has to be recoded at a reduced bit rate. It is highly desirable that the transcoding is carried out in real time while maintaining reasonable image quality. In this paper, we propose a fast approach to derive from an MPEG stream a new MPEG stream with half the spatial resolution. For the downsized video, we ?rst generate from the original compressed video an improved estimate of the motion vectors. We then propose a compressed domain approach with data hiding to produce DCT residues by an open-loop method. The computational complexity is signi?cantly lower than a number of previous approaches. Simulation suggests that our approach produces reasonable image quality.