H.263 is one of the most efficient video compression standards available today. It is expected that H.263 will replace H.261 in many applications. This paper analyzes the computational complexity of H.263 and presents a set of methods for maximizing the performance of this codec based on 64-bit Digital's Alpha processor. The optimization problem is approached from two directions: algorithmic enhancement and efficient software implementation. Performance comparisons are evaluated for the default mode and full-option mode. Finally, this paper provides a brief description of multimedia instructions supported by a new generation of Alpha CPU, which is designed to provide the most cost-effective solution for software-only video compression and other multimedia applications.