A new block-matching algorithm for fast motion estimation is proposed. The so-called Star Diamond Search with Adaptive Threshold (<i>SD<sub>th</sub></i>) is two steps algorithm. Adaptive threshold for matching errors eliminates invalid blocks early from motion estimation procedure. Then it performs a search for final motion vector with a Star Diamond Algorithm. Proposed <i>SD<sub>th</sub></i> algorithm has been implemented and tested using several video sequences. <i>SD<sub>th</sub></i> algorithm is also compared with previous search methods to demonstrate its utility.