MPEG-4 emphasizes on coding efficiency and allows for content-based access and transmission of arbitrary shaped object. It addresses the encoding of video object using shape coding, motion estimation, and texture coding for interactivity, high compression ratio, and scalability. In this letter, an advanced object-adaptive vertex-based shape coding method is proposed for encoding the shape of video objects. This method exploits octant-based representation to represent the relation of adjacent vertices and that relation can be used to improve coding efficiency. Simulation results demonstrate that the proposed method may reduce more bits for closely spaced vertices.