The H.264 standard, jointly developed by the ITU-T and the MPEG committees, is highly efficient offering perceptually equivalent quality video at about 1/ 3 to 1/2 of the bitrates offered by the MPEG-2 format. These significant bandwidth savings open the market to new products and services, including HDTV services at lower bitrates. It is expected that the H.264/AVC will take over the digital video market, replacing the use of MPEG-2 in most digital video applications. The complete migration to the new video-coding algorithm will take several years given the wide scale use of MPEG-2 in the market place today. This creates an important need for transcoding technologies for converting the large volume of existent video material from the MPEG-2 into the H.264 format and vice versa. However, given the significant differences between the MPEG-2 and the H.264 encoding algorithms, the transcoding process of such systems is much more complex to other heterogeneous video transcoding processes. In this paper, we introduce and evaluate a novel fast infra-frame prediction algorithm to be used as part of a high-efficient MPEG-2 to H.264 transcoder. Our results show that the proposed algorithm is able to maintain a good picture quality while considerably reducing the number of operations to be performed. © 2005 IEEE.