Abstract: Embodiments of the invention are directed to a system and method for dynamically defining a search area in a previously-coded reference picture during motion estimation in video encoding. The method includes receiving a sequence of pictures that are divided into a plurality of digital data blocks and defining for a currently-coded data block of a currently coded-picture, a search area within a previously-coded reference picture based on one or more search areas associated with previously-coded data blocks of the currently-coded picture, for example the left data block and the upper data block and further on a search area associated with a previously-coded data block of the reference picture that is co-positioned with the currently coded data block.