In this paper, we propose a novel hardware architecture for an intra- rediction, integer transform, quantization, inverse integer transform, inverse quantization, and mode decision module for the macro block engine of a new video coding standard, H.264. To reduce the cycle of intra prediction, transform/quantization, and inverse quantization/ inverse transform of H.264, a reduction method for cycle overhead in the case of I16MB mode is proposed. This method can process one macroblock for 927 cycles for all cases of macroblock type by processing 4×4 Hadamard transform and quantization during 16×16 prediction. This module was designed using Verilog Hardware Description Language (HDL) and operates with a 54 MHz clock using the Hynix 0.35 μm TLM (triple layer metal) library.