Wavelet transform has recently emerged as a promising technique for video processing applications due to its flexibility in representing nonstationary video signals. In this paper, we propose a fast multiresolution motion estimation (FMRME) scheme based on the wavelet transform for video compression. In FMRME, the set of orientation subimages at each level of the wavelet pyramid are first combined together into a single (all-orientation) sub-image, and then the motion estimation is performed on the newly formed subimage. This contrasts with the MRME scheme (recently reported in the literature) where motion estimation is separately performed on all the individual wavelet subimages. The motion vectors of an all-orientation subimage at a lower level are predicted from the motion vectors at the higher (preceding) level and are refined at each step. The proposed scheme reduces the search time for motion vectors by 66% compared to MRME. In addition, the FMRME scheme has the advantage of significantly reduced side information for the description of motion vectors. Simulations show that the FMRME scheme has considerable reductions in the bit rate which results to significant improvements in coding performance of the FMRME based wavelet coding compared to the MRME based wavelet coding for video compression.