In this paper, we present a new method to speed up the mode decision process using mode prediction. In general, video coding exploits spatial and temporal redundancies between video blocks, in particular temporal redundancy is a crucial key to compress video sequence with little loss of image quality. The proposed method determines the best coding mode of a given macroblock by predicting the mode and its rate-distortion (RD) cost from neighboring MBs in time and space. Compared to the H.264/AVC reference software, the simulation results show that the proposed method can save up to 53% total encoding time with up to 2.4% bit rate increase at the same PSNR.