A method and system for adaptive motion estimation, which sets a search range in a previous frame in order to find a corresponding macroblock in the adaptive search range according to each macroblock of a current frame and to accordingly determine a corresponding motion vector. A motion vector is first determined by referring to a target macroblock of a current frame and reference macroblocks in a search range of a previous frame. Then, a compression mode is determined according to the target macroblock, the reference macroblocks and the motion vector, and a mode data is outputted corresponding to the compression mode. Finally, a search range is determined according to the mode data and the motion vector. Thus, the required computational amount and bandwidth can be saved and also the high-efficiency image compression is obtained.