Power efficiency and real-time processing capability are two major issues in today's mobile video applications. We proposed a novel Motion Estimation (ME) engine for power-efficient real-time MPEG-4 video coding based on our previously proposed content-based ME algorithm [8],[13]. By adopting Full Search (FS) and Three Step Search (TSS) alternatively according to the nature of video contents, this algorithm keeps the visual quality very close to that of FS with only 3% of its computational power. We designed a flexible Block Matching (BM) Unit with 16-PE SIMD data path so that the adaptive ME can be performed at a much lower clock frequency and hardware cost as compared with previous FS based work. To reduce the energy cost caused by excessive external memory access, on-chip SRAM is also utilized and optimized for parallel processing in the BM Unit. The ME engine is fabricated with TSMC 0.18 µm technology. When processing QCIF (15 fps) video, the estimated power is 2.88 mW@4.16 MHz (supply voltage: 1.62 V). It is believed to be a favorable contribution to the video encoder LSI design for mobile applications.