This paper proposes an efficient video coding method which utilizes audio-visual information, based on the observation that sound-emitting regions in a video sequence attract observer’s attention. The regions responsible for the sound are identified by an audio-visual source localization algorithm. Then, the result is used for encoding different regions in the scene with different quality in such a way that a region far from the sound source is coded with a lesser number of bits than the sound-emitting regions. This is implemented by assigning different quantization parameter values for different regions in H.264/AVC. Experimental results demonstrate the effectiveness of the proposed approach.