In the H.263 video codec related systems, motion estimation and Discrete Cosine Transform (DCT)have the most computational requirements. In order to reduce complexity of the encoder to dedicate more resources to other functions, according to the study of existing methods, an Improved All Zero Block Finding (IAZBF) method based on the statistic characteristics of DCT coefficients is proposed. Compared with existing methods, IAZBF improves the detecting efficiency by about 50% without importing too much extra computation requirement. Being computed with additions and shifts instead of complicated multiplications, IAZBF is of low computation complexity, especially for low-end processors. In addition, IAZBF upholds picture fidelity and remains compatible with the H.263 bitstream standard.