Summary: The coexistence of MPEG-2 and its powerful successor H.264/AVC has created a huge need for MPEG-2/H.264 video transcoding. However, a traditional transcoder where an MPEG-2 decoder is simply cascaded to an H.264 encoder requires huge computational power due to the adoption of a complicated rate-distortion based mode decision process in H.264. This paper proposes a 2-D Sobel filter based motion vector domain method and a DCT domain method to measure macroblock complexity and realize content-based H.264 candidate mode decision. A new local edge based fast INTRA prediction mode decision method is also adopted to boost the encoding efficiency. Simulation results confirm that with the proposed methods the computational burden of a traditional transcoder can be reduced by 20%30% with only a negligible bit-rate increase for a wide range of video sequences.