A bio-inspired perceptual video coding algorithm which can reduce the bit rate of the encoded bit stream while maintaining equal perceptual (visual) quality is proposed in this paper. Instead of applying the complicated bio-inspired perceptual model, we propose an algorithm which automatically analyzes the spatial and temporal information in the video sequence, and achieves better bit allocation for video coding systems by changing the quantization parameter (QP) in macroblock (MB) basis. Experiments show that our algorithm achieves about 5-30% bit-rate saving in the QP range of 28-36 without perceptual (visual) quality degradation.