A method for adaptive MV precision is disclosed. According to one embodiment, whether to use or not to use the adaptive MV precision for a current block is determined according to a prediction mode/partition type of the current block. If the adaptive MV precision is used, a current MV precision is determined for a current MV of the current block, and the current MV is encoded or decoded at the current MV precision. If the adaptive MV precision is not used, the current MV is encoded or decoded at a finer MV precision. In another embodiment, a value of a current adaptive MV precision flag is selected for a current block to indicate whether to use or not to use the adaptive MV precision for a current block according to a prediction mode/partition type of the current block.