The H.264/AVC video coding standard can achieve higher compression performance than previous video coding standards, such as MPEG-2, MPEG-4, and H.263. In order to improve the coding performance, the H.264/AVC encoder employs various modes and the rate-distortion (RD) optimization method for selection of an optimum mode. Since the encoder computes RD costs of all possible coding modes to decide the optimum mode, it induces high computational complexity. In this paper, we introduce a fast mode decision method for inter picture macroblocks to reduce the computational complexity. The proposed method significantly reduces the number of candidate modes for the RD optimization process by detecting spatially and temporally homogeneous regions and analyzing motion costs for inter modes and intra prediction costs for intra modes. Experimental results demonstrate that the proposed method drastically reduces the encoding time and the number of the RD cost calculation process while maintaining the high coding efficiency.