Digital video is becoming widely available in compressed form, such as a motion JPEG or MPEG coded bitstream. In applications such as video browsing or picture-in-picture, or in transcoding for a lower bit rate, there is a need to downscale the video prior to its transmission. In such instances, the conventional approach to generating a downscaled video bitstream at the video server would be to first decompress the video, perform the downscaling operation in the pixel domain, and then recompress it as, say, an MPEG, bitstream for efficient delivery. This process is computationally expensive due to the motion-estimation process needed during the recompression phase. We propose an alternative compressed domain-based approach that computes motion vectors for the downscaled (N/2xN/2) video sequence directly from the original motion vectors for the N/spl times/N video sequence. We further discover that the scheme produces better results by weighting the original motion vectors adaptively. The proposed approach can lead to significant computational savings compared to the conventional spatial (pixel) domain approach. The proposed approach is useful for video severs that provide quality of service in real time for heterogeneous clients.