An adaptive bit-reduced mean absolute difference (ABRMAD) is presented as a criterion for the block-matching algorithm (BMA) to reduce the complexity of the very large scale integration (VLSI) implementation and to improve the processing time. The ABRMAD uses the lower pixel resolution of the significant bits instead of full-resolution pixel values to estimate the motion vector (MV) by examining the pixels in a block. Simulation results shaw that the 4-bit ABRMAD has competitive mean square error (MSE) results and a half less hardware complexity than the mean absolute difference (MAD) criterion. It has also better characteristics in terms of both MSE performance and hardware complexity than the MiniMax criterion and has better MSE performance than difference pixel counting (DPC), binary block matching with edge map (BBME), and bit-plane matching (BPM) with the same number of bits. (C) 1998 Society of Photo-Optical instrumentation Engineers. [S0091-3286(98)02112-6].