This　paper　presents　a　fast　variable　block　size　selection　method　for　inter　macro-blocks　in　H.264　video　downsizing　transcoding.　It　makes　use　of　the　relationship　between　motion　direction　and　edge　direction　of　macro-blocks,　and　selects　the　optimal　inter　mode　by　measuring　the　dominant　edge　direction　using　the　residual　macro-block.　Without　fully　decoding　the　compressed　high　resolution　video,　Discrete　Cosine　Transform　coefficients　were　extracted　and　reused　in　transform　domain　to　construct　the　residual　macro-block.　Based　on　the　measurement　of　dominant　edge　direction,　only　a　small　number　of　inter-modes　are　required　for　Rate　Distortion　Optimal　evaluation.　Experimental　results　show　that　the　proposed　method　can　reduce　the　computational　complexity　dramatically　with　little　compression　performance　degradation.　©　2010　IEEE.