The conventional fixed-size block motion compensation technique has two major drawbacks. One is the blocking effect that is visually annoying along with a residual image that is difficult to compress. The other is an ineffective and inefficient representation of the motion information because of the non-adaptive frame partitioning. This paper presents a new method that can adaptively divide a frame according to its motion contents and also effectively reduce the blocking effect by applying a windowing technique. Simulation results show that the proposed method can significantly improve the visual quality of the prediction image and increase the coding efficiency.