In transforming original image frames into two-bit representations, the typical two-bit transform (2BT) needs to calculate variances of the local blocks. This calculation of variances inevitably involves multiplication operations and renders the computational complexity of typical 2BT somewhat high. A constrained 2BT (C2BT) for low-complexity motion estimation (ME) is proposed. By exploiting advantages of the typical constrained one-bit transform (C1BT) and typical 2BT, the proposed algorithm significantly reduces the computational complexity of transformation of image frames into two-bit representations. Also, a corresponding matching criterion for C2BT is proposed to enhance the ME accuracy. Experimental results show that the proposed algorithm enhances the ME accuracy by 0.34 and 0.22 dB compared with 2BT-based ME and C1BT-based ME, respectively.