Block sizes larger than the traditional 16×16 macroblock (MB) structure and extended macroblock (EMB) size motion estimation (ME) are introduced in joint model key technology areas software to improve the inter block coding efficiency. Similar to H.264, variable size motion estimation (VS-ME) is still adopted for each 16×16 MB including 16×16, 16×8, 8×16, 8×8, 8×4, 4×8, and 4×4. EMB size ME and VS-ME achieve the highest possible coding efficiency, but result in extremely large coding time which obstructs it from practical use. A fast mode decision algorithm for EMBs based on motion homogeneity is proposed to reduce the computational complexity of ME. The basic idea of the proposed method is to utilize the spatial property of motion field in prediction where EMB size ME and small size ME (including 8×8, 8×4, 4×8 and 4×4) are needed, and only in these regions EMB size ME and small size ME are enabled. The motion field is generated by the corresponding motion vectors in spatial window. Simulation results show that the proposed algorithm can save 55% average computational complexity, with negligible loss of coding efficiency.