Motion estimation has been shown to help significantly in the compression of video sequences. However, since most motion estimation algorithms require a large amount of computation, it is undesirable to use them in power constrained applications, such as battery operated wireless video terminals. This thesis describes a novel motion estimation algorithm, termed network driven motion estimation, which reduces the power dissipation of wireless video devices in a networked environment by exploiting the predictability of object motion. Since the location of an object in the current frame can be predicted from its location in previous frames, it is possible to optimally partition the motion estimation computation between battery operated portable devices and high powered compute servers on the wired network. In network driven motion estimation, a remote high powered resource at the base-station (or on the wired network), predicts the motion vectors of the current frame from the motion vectors of the previous frames. The base-station then sends these predicted motion vectors to a portable video encoder, where motion compensation proceeds as usual. Network driven motion estimation adaptively adjusts the coding algorithm based on the amount of motion in the sequence, using motion prediction to code portions of the video sequence which contain a large amount of motion and conditional replenishment to code portions of the sequence which contain little scene motion. This algorithm achieves a reduction in the number of operations performed at the encoder for motion estimation by over two orders of magnitude while introducing minimal degradation to the decoded video compared with full search encoder-based motion estimation.