Fidelity Range Extension (FRExt) (i.e. High Profile) was added to the H.264/AVC recommendation in the second version. One of the features included in FRExt is the Adaptive Block-size Transform (ABT). In order to conform to the FRExt, a Fractional Motion Estimation (FME) architecture is proposed to support the 8×8/4×4 adaptive Hadamard Transform (8×8/4×4 AHT). The 8×8/4×4 AHT circuit contributes to higher throughput and encoding performance. In order to increase the utilization of SATD (Sum of Absolute Transformed Difference) Generator (SG) in unit time, the proposed architecture employs two 8-pel interpolators (IP) to time-share one SG. These two IPs can work in turn to provide the available data continuously to the SG, which increases the data throughput and significantly reduces the cycles that are needed to process one Macroblock. Furthermore, this architecture also exploits the linear feature of Hadamard Transform to generate the quarter-pel SATD. This method could help to shorten the long datapath in the second-step of two-iteration FME algorithm. Finally, experimental results show that this architecture could be used in the applications requiring different performances by adjusting the supported modes and operation frequency. It can support the real-time encoding of the seven-mode 4K×2K@24fps or six-mode 4K×2K@30fps video sequences.