A new real-time watermarking technique based on H.264/AVC video standard is proposed. The algorithm works in the compressed domain by embedding watermark bits into quantized DCT coefficients of 4×4 blocks of the I-frame during the Context-based Adaptive Variable Length Coding (CAVLC) process. CAVLC offers a lower computational complexity which is efficient to the algorithm. During watermark extraction, the entire video do not need to be decoded,which meets the requirement of the real-time processing.The scheme yields tiny bit-rate change after watermarking and the degradation of video quality is negligible. The simulation results show that watermark embedded is fragile and is easily distorted under attacks, which can be used for the video authentication or covert communication applications.