Thispaper describes anewtranscoding algorithm, able to transcode anycoded(e.g.MPEG-2) bit-stream intoan H.264sequence witharbitrary spatial resolution change. Thevisual quality atagiven input andoutput bit-rate is close orequal tofulldecoding followed bya full encoding (0.5 dB-to-2 dBless inPSNRthanthat ofreencoding thestream atthetarget resolution) while, from thecomplexity point ofview, theproposed transcoding approach isatleast tentimes faster than re-encoding. The experimental results showthatthisH.264transcoder always gives about 20to6000better compression than that ofthesize oftheoriginal MPEG2sequence scaled by thetarget resolution ratio atequal subjective quality. Usingconstant quantization parameters bothinthe transcoding andre-encoding, transcoding gives 20to40 00lesser compression than re-encoding.